A Comprehensive Guide to Home Loans

What is Home Loan?

A Home Loan is the amount of money borrowed for the purpose of purchasing a residential property or apartment. Your home loan is secured against the property that you buy. This means that in case you are not able to repay the loan amount along with specified interest, the lending bank will have the right to seize the property or house.

Two main points to be considered for taking a Housing Loan: -
a) Amount of principal

b) Rate of interest

The principal is the amount of loan the lending bank or financial institutions provide to the buyers. The principal depends on the following points: -
1) The income of the borrower
2) The repayment capacity of the borrower
3) The value of the house property or apartment the borrower is going to purchase


Interest rates are of two types viz. Fixed rate of interest and Floating rate of interest. In fixed rate the interest becomes same throughout the repayment period. Floating rate the interest changes depending on the market situations.

Main features to be considered of Housing Loan: -
a) Availability of loans means loan amount is given by the bank or financial institutions for ready flats, property under construction or residential property of which the construction will be starting very shortly.

b) Loans are available for both salaried persons and as well as self employed.

c) Flexibility of repayment options and period of repayment.

d) Easy EMI and favourable interest rates.

e) Documents transferability that means if the borrower would like to change the lender the existing documents may easily be transferred.