Home loans

Home loans India forms an important ladder of encouragement towards investment. Home loans can be divided into two main aspects of home loans and property loans. Property loans are loans for real estate. To understand the gist of such loans, one has to understand the economic dynamics of Indian society. People in all sectors seek to buy land, plots, be it residential or non-residential, for power, prestige and social status. Ownership of land constitutes an important dynamic in India.


Loan to buy Property:

Today, national, state and local banks are extending loans more than Rs. 25 lac to purchase and develop residential and non residential property. This takes the form of a secured personal loan where you borrow to buy property against the collateral of existent property. This means that this is a loan against property in India. Thus, these loans are restricted to Indian residents whose primary occupation is land based - banks will hesitate to extend this loan to an Indian resident who cannot provide legal documents stating that his primary source of income comes from land; his occupation is land based. These loans are usually offered at fixed high rates of interest.


Commercial real estate loans:

These loans are mainly urban in nature. They are given to all individual applicants, consumer business entities for the purpose of the purchase of commercial property in a residential area. However, the applicant has to prove that the commercial property in question is going to be used for personal purposes only. These may include the furtherance and improvement of self, family and community in realms of education, medical health and monetary economic standard. More than 99% of applicants of this loan also go in for the commercial real estate development loan. The IDBI plays a prominent role in such loans.


Home loans in India:

These are personal secured loans following a flexible format. Home loans offer advantages of floating low interest rates for individual applicants which leads to broad tax benefits. These loans require minimal documentation and verification. In this regard, you have the option to directly approach a bank for your loan. You can go to a home finance company to be the middleman. But usually applicants prefer to go online and do their homework. Once they have decided about the loan they want, they approach the bank directly. Usually banks require that the applicant be a permanently employed resident less than 65 years of age. This also includes self employed individual's and businessman. Stipulations also state that every applicant must carry and submit identity proof in the form of passport and driving license. Consumer businesses and partnerships must follow more stringent rules of proving financial capacity. But, the success of a home loan plan depends on your discipline to make the payments regularly, try to reduce your interest rate with time. A home loan can be given for the purchase, construction, extension and development of a residential property. Usually, the average EMI for such residential loans is relaxed amounting to more than 48 EMIs.


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