What are Types of home loans available?

Types of home loans available in the market are:

  • Home Purchase Loans
  • Home Construction Loans
  • Home Improvement Loans
  • Home Extension Loans
  • Land-Purchase Loans/Plot Loans
  • NRI Home Loans
  • Balance Transfer
  • Bridge Loan

housing loan is a specified sum of money borrowed from banks and Housing Finance Companies (HFCs) to purchase a house. Important factors to be considered while seeking a house loan are interest rate, loan amount, loan tenure, monthly EMIs on house loan  and credit score.

To help customers meet their varying housing needs, financial institutions offer different types of home loans.

Home Loan Types

An individual can choose a home loan as per the need and affordability. Mentioned below are the different types of home loan products available in India:

Home Purchase Loans

This type of loan is taken to buy a residential property, including flats, row houses and bungalows. The maximum loan amount offered by banks is 90% of the present market value of the property. For Non-Banking Financial Companies (NBFCs), this value is 80%.

Eligibility Criteria for Home Purchase Loans

An individual, who wants to avail a home purchase loan, must fulfill the following general conditions to be eligible for the loan. These criteria may vary from lender to lender.

Particulars Salaried Professionals Self-Employed Individuals
Age 18 – 65 years 18 – 65 years
Employment Min. 2 years of experience Min. 5 years of experience
Credit Score 750 or above 750 or above

Documents Required for Home Purchase Loan

Mentioned below are some common documents required for availing a home purchase loan. However, the requirements may vary from provider to provider.

  • Age Proof (Birth certificate, Class 10 marks sheet, etc.)
  • Address Proof (Copy of passport, Voter ID, Utility bills, etc.)
  • Income Proof (Salary slips and ITR details)
  • Identification Proof (PAN card, Passport, Voter ID, etc.)
  • Existing Loan Documents (if any)
  • Documents of Property to be Purchased

Home Purchase Loan Interest Rates

Mentioned below are the interest rates offered by leading banks on home purchase loan:

Banks Interest Rate Processing Fee
SBI 8.15% onwards Up to 0.35% of the loan amount (Min. Rs. 2,000;  Max. Rs. 10,000)
HDFC Bank 8.25% onwards Up to 0.5% of the loan amount
ICICI Bank 8.65% onwards 0.5% – 1.00% of the loan amount (Min. Rs. 1,500)
Axis Bank 8.55% onwards Up to 1% of the loan amount (Min. Rs. 10,000)

Home Construction Loans

This type of home loan can be availed by the owner of land to meet the costs of constructing a new house. The loan can also be taken to finish the construction of an unfinished house.

Eligibility Criteria for Home Construction Loan

Following are the conditions that an applicant must meet to be eligible for availing a home construction loan. These criteria may vary from lender to lender.

Particulars     Salaried Professionals Self-Employed Individuals
Age 18 – 65 years 18 – 65 years
Employment Min. 1 year of experience with current employer Available for professionals and non-professionals
Credit Score 700 or above 700 or above

Documents Required for Home Construction Loan

Mentioned below is the list of documents required for availing a home construction loan. However, the requirements may vary from provider to provider.

  • Age Proof (Birth certificate, Class 10 marks sheet, etc.)
  • Address Proof (Copy of passport, Utility bills, Voter ID, etc.)
  • Income Proof (Salary slips and ITR details)
  • Identification Proof (Passport, PAN card, Voter ID, etc.)
  • Existing Loan Documents (if any)
  • Property Documents

Home Construction Loan Interest Rates 

Mentioned below are the interest rates offered by leading banks on home construction loan.

Banks Interest Rate   Processing Fee
SBI 8.15% onwards Up to 0.35% of the loan amount (Min. Rs. 2,000;  Max. Rs. 10,000)
HDFC Bank 8.25% onwards Up to 0.5% of the loan amount
Canara Bank 8.35% onwards Up to 0.5% of the loan amount
DHFL 9.75% onwards Up to Rs. 20,000+GST

Home Improvement Loans

This type of home loan can be availed to renovate, repair or refurnish your home. Home improvement loans are very popular due to low interest rate.

Eligibility Criteria for Home Improvement Loan

Following are the conditions that an applicant must meet to be eligible for availing a home improvement loan. These criteria may vary from lender to lender.

Age 18 – 65 years
Employment
  • Salaried Individuals
  • Self-Employed: Available for both Professionals and Non-Professionals

Documents Required for Home Improvement Loans

Mentioned below is the list of documents required for availing a home improvement loan. However, the requirements may vary a bit from provider to provider.

  • Age Proof (Birth certificate, Class 10 marks sheet, etc.)
  • Address Proof (Copy of passport, Utility bills, Voter ID, etc.)
  • Income Proof (Salary slips and ITR details)
  • Property Title Deeds (Original)
  • Estimated Renovation Quotation

Home Improvement Loans Interest Rates

Mentioned below are the interest rates offered by leading banks on home improvement loan.

Banks Interest Rate Processing Fee
PNB Housing Finance Ltd. 9.25% onwards Up to 0.35% of the loan amount (Min. Rs. 2,500;  Max. Rs. 15,000)
HDFC Bank 8.25% onwards Up to 0.5% of the loan amount
Canara Bank 10.80% onwards Up to 0.5% of the loan amount
Bank of Baroda 8.10% onwards 0.50% of the loan amount

Home Extension Loans

This type of loan is taken when an individual wants to extend or add more space to the home. For instance, adding a room as per growing family needs.

Eligibility Criteria for Home Extension Loans

Following are the conditions that an applicant must meet to be eligible for availing a home extension loan. These criteria may vary slightly from lender to lender.

Age 18 – 65 years
Employment ●Salaried Individuals
●Self-Employed: Available for both Professionals and Non-Professionals

Documents Required for Home Extension Loans

The table below shows the documents required for availing a home purchase loan. However, the requirements may vary a bit from provider to provider.

  • Age Proof (Birth certificate, Class 10 marks sheet, etc.)
  • Address Proof (Copy of passport, Utility bills, Voter ID, etc.)
  • Income Proof (Salary slips and ITR)
  • Existing Loan Documents (if any)
  • Property/Home Extension-Related Documents

Home Extension Loans Interest Rates

Mentioned below are the interest rates offered by leading banks on a home extension loan.

Banks Interest Rate Processing Fee
HDFC Bank 8.25% onwards Up to 0.5% of the loan amount
DHFL 9.75% onwards Up to Rs. 20,000+GST
Tata Capital 11% onwards Varies with the loan amount

Land-Purchase Loans

This type of home loan can be availed for the purchase of land or a plot loan for construction or as an investment.

Eligibility Criteria for Land-Purchase Loans

Following are the conditions that an applicant must meet to be eligible for availing a land-purchase loan.

Age 18 – 65 years
Employment ●Salaried Individuals
●Self-Employed: Available for both Professionals and Non-Professionals

Documents Required for Land-Purchase Loans

The table below shows the documents required for availing a home purchase loan. However, the requirements may vary a bit from provider to provider.

  • Age Proof (Birth certificate, Class 10 marks sheet, etc.)
  • Address Proof (Copy of passport, Utility bills, Voter ID, etc.)
  • Income Proof (Salary slips and ITR)
  • Existing Loan Documents (if any)
  • Property-related Documents

Land-Purchase Loans Interest Rates

Mentioned below are the interest rates offered by leading banks on land-purchase loan.

Banks Interest Rate Processing Fee
HDFC Bank 8.55% onwards Up to 0.5% of the loan amount
PNB Housing Finance Ltd. 10.25% onwards Up to 0.5% of the loan amount
Bajaj Finserv 8.60% onwards Up to 1.20% of the loan amount
DHFL 10.25% onwards Up to Rs. 20,000+GST

NRI Home Loans

This type of home loan is taken by Non-Resident Indians for construction of a house or renovation of an old property in India. The maximum tenure for this loan can go up to 30 years, and the interest rate can be fixed or floating.

Eligibility Criteria for NRI Home Loans

Following are the conditions that an applicant must meet to be eligible for availing a home purchase loan. These criteria may vary slightly from lender to lender.

Age 18 – 60 years
Employment Salaried Individuals or Self-Employed with at least 2 years of work experience in present company

Documents Required for NRI Home Loans

The table below shows the documents required for availing a home purchase loan. However, the requirements may vary a bit from provider to provider.

  • Passport and work visa copy
  • Proof of valid work permit
  • Copy of employment contract
  • Current overseas residential proof
  • Salary slips of past three months
  • Salary account statement for past six months
  • General power of attorney
  • Last year ITR except for NRIs in Middle East nations and Merchant Navy Employees
  • Property papers

NRI Home Loans Interest Rates

Mentioned below are the interest rates offered by leading banks on home construction loans.

Banks Interest Rate Processing Fee
PNB Housing Finance Ltd. 9.25% onwards Up to 1% of the loan amount
(Max. Rs. 10,000)

Balance Transfer

Home loan balance transfer can be availed by an individual who wants to transfer an existing home loan from a bank/NBFC to another provider/lender. The major reason for availing this loan is getting a lower interest rate from the new lender and availability of top-up facility.

Eligibility Criteria for Balance Transfer

Mentioned below are some of the general conditions that an applicant must meet to be eligible for availing a home loan balance transfer. However, these criteria may slightly vary from lender to lender.

Age 18 – 65 years
Employment Salaried Individuals and Self-Employed professionals having a clear track record of timely repayments with the previous lender.

Documents Required for Balance Transfer

Following is the list of documents required for availing home loan balance transfer.

  • Age Proof (Birth certificate, Class 10 marks sheet, etc.)
  • Address Proof (Copy of passport, Utility bills, Voter ID, etc.)
  • Income Proof (Salary slips and ITR details)
  • Bank statement showing repayment of ongoing loan
  • Property-related Documents
  • Loan statement and list of property documents in possession of the existing lender

Balance Transfer Interest Rates

The table below shows the interest rates offered by leading providers for home loan balance transfer.

Banks Interest Rate Processing Fee
SBI 8.15% onwards Up to 0.35% of the loan amount (Min. Rs. 2,000;  Max. Rs. 10,000)
HDFC Bank 8.25% onwards Up to 0.50% of the loan amount or Rs.3,000 whichever is higher, plus applicable taxes
ICICI Bank 8.65% onwards 0.50% of the loan amount + GST
Bajaj Finserv 8.55% onwards Up to 1% of the loan amount

Bridge Loan

This type of home loan is taken by people who want to a buy another property by selling off the existing one. The fund helps meet short-term fund requirements like down payment for the new house till the old property is not sold off. Bridge loans are generally offered at higher interest rates with a maximum repayment tenure of up to 2 years.

Eligibility Criteria for Bridge Loan

Age 18 – 70 years
Eligible customers All property owners and co-applicants

Documents Required for Bridge Loan

Following is the list of documents required for availing bridge home loan.

  • Age Proof ((Birth certificate, Class 10 marks sheet, etc.)
  • Address Proof (Copy of passport, Utility bills, Voter ID, etc.)
  • Income Proof (Salary slips and ITR)
  • Bank statement showing repayment of ongoing loan
  • Property-related Documents

Bridge Loan Interest Rates

The table below shows the interest rates offered by leading providers for bridge loan.

Banks Interest Rate Processing Fee
SBI 1st year: 10.35%2nd year: 11.60% Up to 0.35% of the loan amount (Min. Rs. 5,000)