Home Loans

Individuals may obtain home loans from banks, financial institutions, and non-banking financial companies to purchase residential properties. To purchase a property, collateral is offered as security. A home loan is a high-value loan offered at a low-interest rate and for a longer repayment period that is repaid via EMIs. Property ownership is returned to the borrower after repayment.

Types Of Home Loans

• Home purchase loan: Taken to purchase a home.
• Home improvement loan: Taken to repair or renovate a home.
• Home construction loan: Taken to build a new house.
• Land purchase loan: Taken to buy a plot of land for constructing his or her own house.
• Home extension loan: Taken to add another floor, room, garage, bathroom, kitchen etc.
• Home loan balance transfer: This allows you to switch lenders and transfer your outstanding loan amount to enjoy betterli
• service and lower interest rates.

Eligibility

Banks have a list of eligibility criteria for home loans. The first thing banks look at is one’s credit history to understand their repayment habits. Some other factors are:-

• Age
• Employment Type
• Minimum Annual Salary
• Collateral Security
• Margin Requirements
• Assets, liabilities, stability and continuity of occupation
• Residency Status

Benefits of Taking a Home Loan

Tax Benefits

The foremost benefit of a home loan is the income tax deduction you can claim on the interest and principal repayments.

Lower interest rate

The home loan interest rate is much lower as compared to any other loan type available.

Due diligence of property

The bank will conduct thorough checks on the property from a legal perspective and check if all the documents produced are valid.

Long repayment tenure

Home loans come with longer repayment tenure of 25-30 years.

No prepayment penalty

When you take a floating-rate home loan, you can make prepayments towards the loan whenever you have a lump sum at hand without having to pay any prepayment penalty.

Balance transfer facility

For several reasons such as the interest rate, service charges and customer service experience, a home loan can be transferred from one lender to another.