How Many Types of Home Loan You Know?

Types of Home Loans

  • Home Purchase Loan is offered for buying ready-to-move-in properties, under-construction properties and pre-owned homes/resale properties. helps you buy a residential plot and build a house on it within a given time frame
  • Composite Loan can be availed for buying a plot and building a house on it. The first disbursement in composite loan is made towards plot purchase. Subsequent payments depend on the stages of construction of the house.
  • Home Construction Loan is offered to individuals for house construction. The disbursements depend on the stages of construction of the house.
  • Home Renovation/ Improvement Loan is for meeting home renovation costs of an existing house. The interest rate for a home renovation/improvement loan and a regular home loan are usually same.
  • Home Extension Loan is for those requiring funds to extend or add more space to their existing house. In this, lenders usually lend 75% – 90% of the construction estimate, depending on the loan amount and LTV ratio.
  • Bridge Loan is a short-term home loan suitable for individuals planning to buy a new house with the sale proceeds of their existing house.
  • Interest Saver Loan is a home loan overdraft wherein the borrowers’ home loan account is linked to their bank account. Any amount deposited in the bank account over and above the EMI is considered as a prepayment towards the loan, thus, saving on the interest amount.
  • Step Up Loan allows borrowers to pay lower EMIs during the initial years of the loan tenure and have the provision of increasing the EMI amount over time. This makes the loan affordable for young professionals who have just started their career.
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Oct, 2023
Joint Home Loan

Benefits of Joint Home Loan

A home is a ‘once-in-a-lifetime’ investment for many of us. It is natural that we want to make it as big and better as practically possible. Here comes the Joint Home Loan which makes it more affordable. Affordability is what determines the size, location and quality of our home. No doubt, having the possibility of availing a home loan has improved loan bracket limits.

However, your home loan eligibility depends on your age, income levels, other loans that you are still repaying, etc. Lenders have prudent norms which stipulate that your home loan EMI combined with all the other EMIs that you may be presently repaying, cannot exceed a certain level of your take-home pay.

Following are the benefits of taking a joint home loan:

Increases Your Home Loan Eligibility

You may consider having your spouse or family member as the co-applicant, as this is a proven way to get a higher loan amount sanctioned.

By pooling your and your spouse’s incomes together while making a joint home loan application, the loan application becomes eligible for a higher loan amount and can hence afford a bigger / better home.

Buy a Bigger Home

Having more budget in hand to buy your dream home is important. You may plan to buy a bigger house with the help of joint home loan. In fact, we compromise on small room size, less space due to budget crunch. Due to joint home loan you will get additional loan amount. Bigger home will solve many of other space and occupancy related issues. You may find is better to apply the loan with your spouse or family member as a co-applicant

Higher Tax benefits

By applying jointly for a home loan, tax deduction available on home loan can be enjoyed by the co-applicants separately, provided they are co-owners of the property and each of them is contributing to the home loan repayment. a) Principal repayments are eligible for deduction under Section 80C of the Income Tax Act up to a maximum limit of Rs.1.50 lakh. b)

Home loan interest payments enjoy tax deduction under Section 24 up to Rs 2 lakh if the property is self-occupied; if the property is let out, the entire interest becomes eligible for tax deduction, i.e., there is no maximum limit.

Women Co-applicant gets lower rate of Interest

Many bank and NBFCs offer a differentiated home loan interest rate for women customers, which is usually a few basis points lower than the normal home loan rates. To take benefit of the discounted interest rate, a woman has to be the sole or joint owner of the property and an applicant or co-applicant for the home loan.

Hence it is always wise to include a women co-applicant in your joint home loan application.

Share Your Debt Burden

When you share the loan amount, you also share the EMI Burden. Both co-applicant share the debt burden. Your EMI may end quite early. Repayment of joint home loan will be early and this will give you more financial freedom.

MSME Loan Schemes from SIDBI

SIDBI or Small Industries Development Bank of India, works for the growth and development of entrepreneurship and industries in India. The organization has been actively involved in managing various esteemed government projects, demonstrating its commitment and enthusiasm.

One of the notable schemes managed by SIDBI is the PM SVANidhi Scheme, which aims to support and uplift the livelihoods of street vendors. This scheme provides financial assistance, access to credit, and other resources to street vendors, enabling them to improve their businesses and contribute to the economy.

SIDBI is also involved in initiatives to enhance infrastructure in the Animal Husbandry sector through the AHIDF Scheme. This scheme focuses on providing financial support by way of interest subvention for the development of infrastructure, such as cattle feed plants, milk processing units, and veterinary hospitals, among others. By bolstering the animal husbandry sector, SIDBI contributes to the overall growth of rural economies and employment opportunities.

In line with supporting the national livestock, SIDBI actively participates in the National Livestock Mission. This mission aims to enhance livestock productivity, improve animal health and welfare, and promote sustainable practices in livestock farming. SIDBI’s involvement in this mission ensures the availability of financial resources and guidance to the stakeholders involved in livestock development.

Launched in 2015, SMILE is governed by the Small Industries Development Bank of India (SIDBI). The aim of this scheme is to provide soft loans, meet the required debt-equity ratio for the establishment of new MSMEs, and also to enable the growth of existing ones. Below mentioned are the MSME loan schemes offered under SIDBI

  1. General Purpose Term Loan
  2. Secured Business Loans for MSMEs
  3. SIDBI and Google Partnership for Assistance to Micro Enterprises (SANGAM)
  4. SIDBI’S Term Loan to enhance the production of MSMEs (STEP) Scheme
  5. SIDBI Assistance to Export Oriented MSMEs under UBHARTE SITAARE PROGRAMME
  6. SIDBI Thematic Assistance for Purchase of Capital Assets in New Enterprises (STHAPAN)
  7. Assistance to Re-Energize Capital Investments by SMEs (ARISE)
  8. SIDBI Term-Loan assistance for Rooftop Solar Photovoltaic (PV) Plants (STAR)
  9. SIDBI – Loan for Purchase of Equipment for Enterprise’s Development Plus (SPEED PLUS)
  10. SIDBI – Loan for Purchase of Equipment for Enterprise’s Development (SPEED)
  11. Working Capital (Cash Credit)
  12. TOP Up Loan for Immediate Purposes (TULIP)

Pradhan Mantri MUDRA Yojana (PMMY)

The Pradhan Mantri Mudra Yojana launched in 2015 aims at providing credit of upto Rs 10 lakh to small entrepreneurs and act as a regulator for Micro-Finance Institutions (MFIs). Mudra Loan targets young educated or skilled workers and entrepreneurs including women entrepreneurs.

The scheme is designed to promote and ensure access of financial facilities to Non-Corporate Small Business Sectors (NCSBS) that will turn them into instruments of GDP growth and employment generation. The loans are easily accessible in three categories- Shishu, Kishore and Tarun to signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur and also provide a reference point for the next phase of graduation / growth. For more details on scheme please visit https://www.mudra.org.in/

Eligibility

Any Indian citizen who has a business plan for a non-farm sector income generating activity such as manufacturing, processing, trading or service sector and whose credit need is less than Rs. 10 lakh can approach either a bank, MFI, or NBFC for availing the Mudra loan.

Loan Types -Amount

Maximum loan amount : Upto Rs 10 lacs

  • Loans upto Rs.50,000 are categorised as SHISHU
  • Loans from Rs.50,001 to Rs.500,000 are categorised as KISHORE
  • Loans from Rs.500,001/- to Rs.10,00,000/- are categorised as TARUN

What are the documents required for Mudra Loan?

ID Proof: Self Attested copy

  • Adhar
  • PAN
  • Driving License
  • Voter ID
  • Passport
  • ID Card issued by Government Departments

Address Proof: Self Attested

  • Adhar
  • Passport
  • Voter Id
  • Utility Bill- Electricity, Water, Gas, Telephone etc
  • Domicile Certificate
  • Latest Account Statement or Bank Passbook

Proof of Business

  • Registration Certificate
  • License Certificate
  • MSME Udyam Registation
  • GST Registration Certificate

Other Important Documents required to apply Mudra Loan

  • Photographs of Business Owners and Partners
  • Cast Certificate- SC/ST/OBC
  • Balance Sheet & ITR of last 3 years
  • GST Return
  • Bank Statement of 6 months
  • Sales/Revenue Details
  • Estimated balance sheet of next one year
  • Project Report or Business Report for getting loan

How to apply for used car loan?

Used car loans are provided at attractive interest rates and come with a repayment tenure of up to 7 years. Certain lenders provide loans of up to 100% of the car’s value. Most banks and NBFCs provide used car loans. Self-employed individuals and salaried employees can avail themselves of a used car loan.

Buying a used car is often a better value because they’re cheaper, and you can avoid the big depreciation hit that comes with driving a new car off the lot. However, arranging the financing for a used car is a very different story.

Used car loans typically come with higher interest rates and have more restrictions on the type of car you can buy compared to new car loans. But there are still good options. we’ve compiled the best used car loan companies, based on rates, terms, and fees, to help you find the right loan for your vehicle. 

Features of Used Car Loan

Loan Amount

  • Get between 3 to 6 times your yearly income
  • Borrow up to 100% of the value of the car
  • Maximum loan tenure of 60 months
  • Age of Car at loan maturity up to 10 years

Flexible Repayment Tenure

These loans come with a flexible repayment tenures from 12 months to 84 months. However it varies lender to lender

Loan without income document

You can easily Get 80% to 85% of the value of the car as loan amount for 3-5 years without income proof. Here your car is itself an asset for lenders.

Used Car Loan Eligibility Criteria

The following people are eligible to apply for a used Car Loan:

Salaried Individuals:

  • This includes doctors, CAs, employees of private limited companies, employees from public sector undertakings, including central, state and local bodies
  • Individuals who are a minimum of 21 years of age at the time of applying for the loan, and no older than 60 at the end of the loan tenure
  • Individuals who have had a job for at least 2 years, with a minimum of 1 year with the current employer
  • Those who earn a minimum of Rs. 2,50,000 per year, including the income of the spouse

Self Employed Individuals:

  • This includes self-employed sole proprietors in the business of manufacturing, trading or services
  • Individuals who are a minimum of 25 years of age at the time of applying for the loan, and no older than 65 at the end of the loan tenure
  • Those who have been in business for a minimum of 3 years
  • Should earn at least Rs. 2,50,000 per annum

You may choose to apply with many lenders.

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