With the surging real estate prices in India, home loans are the ideal financing facility for aspiring homeowners. To further encourage home buyers, financial institutions are now providing different types of home loans to enable borrowers to fulfil their dream of owning a home.
With Navi Home Loans, you can get financing of up to Rs.5 crore at attractive interest rates starting at 6.46% p.a. The paperless application process makes it much simpler for aspiring homebuyers to get loans with Navi.
Here are the interest rates of various housing finance options:
|Type of Loan||Interest Rate (p.a.)|
|Navi Home Loans||6.46%|
|Home construction loan||Usually above 6.90%|
|Home improvement loan||Usually above 6.75%|
|Home extension loan||Usually above 6.90%|
|Land-purchase loan||Usually above 6.95%|
|NRI home loan||Usually above 7.55%|
|Bridge loan||Usually above 9.50%|
Financial institutions provide loans for land purchases so that borrowers can buy a plot on which they want to construct a house. Tax deductions on land loans can be availed of only when the construction is completed. Usually, loan providers sanction up to 80-85% of the land’s market value, implying that borrowers have to pay the remaining 15-20% as a down payment.
Borrowers can avail of a home purchase loan to finance the purchase of a new home. It is important to determine eligibility and repaying capacity before starting the home loan process. Your repayment capacity is based on factors such as total monthly income/ monthly expenses, and other factors like spouse’s income, assets, liabilities, stability of income, etc. One can get up to 80% of the residential property’s market value with this financing option. At Navi Loans, we offer up to 90% of the property’s market value as a loan. Download the Navi app today to apply for home loans up to Rs.5 crore.
Home-construction loans are designed for individuals who wish to construct a residential property on an owned/co-owned piece of land. In this case, the amount of loan that a financial institution can sanction depends upon a rough estimate of the construction cost.
Individuals who own a house but do not have the financial capability to renovate it can avail of a home improvement loan. Renovation may include repairing an existing property, re-painting walls, installation of new light fixtures, an extension of the house and more. Here’s how the loan works: The borrower shares a cost estimate of the work intended to be done with the lender, who will take a quotation from the contractor to verify the estimate submitted. The money is released at the rate of the construction work to the contractor to whom it is due.
Individuals who have already availed of a home loan but want to sell the property and buy a new home can opt for a home conversion loan. By choosing this type of housing credit, borrowers can purchase a new residential property by transferring the existing loan to the new house. They do not have to repay the loan or seek another lender.
However, note that this option is a bit more expensive in comparison to other types of home loans on this list.
This type of home loan is specifically designed for non-resident Indians who want to purchase a residential property in India. The application process and the documentation are different from those of the other types of home loans available in India. Nevertheless, the structure of this housing loan is similar.
A bridge loan is a short-term financing option that homeowners can avail to buy a new residential property by selling their existing one. Individuals can utilise the loan amount to finance the purchase of the new home until they are able to sell the old property. Usually, bridge loans come with a high-interest rate and have a tenure of fewer than two years.
Please note that the eligibility criteria for various types of house loans may vary depending upon the lender.
Here is a tabular representation of the basic parameters:
|Parameters||Likely Eligibility Criteria|
|Age of the applicant||18-65 years|
|CIBIL score||750 and above|
|Work experience of salaried professionals||At least 2 years|
|Business vintage (for self-employed individuals)||At least 5 years|
|Minimum salary||Rs. 25,000|
The documents required for each type of home loan are not the same. However, individuals might need to submit these if they opt for any type of housing finance option:
Here’s a tabular representation of the additional documents required for each of the different types of home loans:
|Type of Loan||Documents|
|Home-purchase loan||Documents of the property|
Existing loan documents
|Home-construction loan||Property-related documents|
Existing loan documents
|Home-improvement/renovation loan||Original property ownership documents|
The estimated cost of renovation
|Land-purchase loan||Property-related documents|
Existing loan documents
|NRI home loan||A valid work permit|
Proof of current overseas residence
Passport and copy of work visa
A general power of attorney
|Bridge loan||Bank statement representing the repayment of the existing loan|
With Navi, individuals can get approval on a home loan in less than 5 minutes via a streamlined paperless application process. Download the Navi app to know more.
It is crucial for prospective borrowers to do their fair share of research about different types of home loans available in India. This will help them select an option that is best suited for their financial requirements. However, they should also compare the interest rates charged by different lenders before making a decision.
Ans: Individuals can compute their home loan EMIs easily using a home loan EMI calculator. After entering the loan amount, tenure, and interest rate, the EMI will be displayed on the screen.
Ans: Usually, required documents, in this case, are sale deed, most recent tax receipts, clear and marketable title, possession certificate, and occupancy certificate. Also, they need to submit building plan approvals.
Ans: An amortization schedule is a table that provides all details in relation to the home loan. It lays out the interest and principal components of each EMI payment. Such a chart is provided by the home loan provider.
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