Dreaming for New Home? Here’s how to apply for home loans


A loan is typically lending of money by an individual, group of peoples or an organization to any individual or organizations, etc. Home loans are a special type of loans in which the borrower uses his property or land as collateral to the lender.

After getting home loan individual’s probability of owning a home gets increased. There are still many people who have a dream to build their home especially the economically weaker categories of people. Few of the middle-class families in India also could not make a house with their savings, so loan becomes a boon for such peoples.


Investing in a property is always considered as positive move according to the business professionals as the price of land always tends to increase in the future. Home loans have many different types and many different organizations offering it at different interest rates.

Different types of home loans

There are different categories of home loans which are discussed below according to their types

  • Land Purchase Loan:

This is a particular type of loan given for the purchase of a plot for erecting house or shop. This kind of loan is also given for investment in the property.

Usually, the loan amount value is 85 % of the price of the plot. The loan is given irrespective of your previous homes or property just borrower have a condition of repaying a loan.

  • Home Construction Loan:

This loan category is given to the borrower to construct the house in a way that is desired by the borrower. The method of obtaining the house construction loan is a little bit different than the usual loans. This category of home loans requires the estimated cost of constructing the house.

The process of obtaining a loan becomes easy if the suitable and required documents are provided to the concerned authority. Some organizations give this loan in installments.

  • Home Purchase Loan:

This is the similar category home construction loan but is not given in installments but given in one payment. This kind of loan is given at both floating and fixed interests.

Even some are given with the combination of interests known as hybrid type interests. You need to have proper collateral for this loan.

  • Home Renovation Loan:

This is a special category of the loan in which the amount to be provided is limited and fixed according to the work to be done. Using this loan borrower can repair the house furniture, electrical systems, and other leakage problems.

This loan is also used to extend the place or build a new room in already built houses.

  • Bridged Loan:

This is a kind of conversion loan for short term period. Here an individual can move to a new home with an existing In this kind of loan, a person can move to a new house by paying an extra amount or pre-payment on the prior loan.

The loan gets converted and there is no need to pay a loan on the previous home. This kind of loan requires a lot of documents and suitable collateral.

Eligibility Required:

The following mentioned are the prerequisites for having a house loan.

  • Employment Stability:

Salaried employment for at least 2 years or self-employment of 5 years is necessary for applying for a loan.

  • Age Criteria:

The young applicants are at benefit of getting a loan however the age preferred by the loan companies is between 20–60. Which has the tolerance of 5 in lower and upper limit in case of a self-employed individual?

  • Credit rating:

A good credit rating is must for an applicant where the positive rating will increase the chances of getting a loan at a suitable rate of interest, EMI, tenure while the negative rating due to fraudulent tracks, outstanding loans can lead to cancellation of current loan application.

  • Employer:

Employment in a reputed company or working with a known employer is an asset for an individual to gain success in achieving loan in short period.

  • Financial Situation:

This is also an important factor the past records are verified for a proof whether the individual holds a good financial record further smoothening the process of loan and its tenure.

The loan can be applied online or offline with various loan granting organization with a complete loan application, photo ID, address, ownership, income, job continuity, bank statement, property documents, and investment proof.