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Update Date : 31-Dec-2022

Created Date : 31-Dec-2022

Category : Home Loan E-Book (Promotional_New)

The 5 most popular home loan variants

Banks and financial institutions offer a wide range of product variants under the home loan segment that addresses the distinct needs of various home buyers.

Here, making the right product selection based on your specific financial needs is very critical.

The benefits and features of certain products can not only help you save interest but also help you fix many of your financial pain points.

Hence, every home loan borrower, while exploring deals must also study and buy products that work for them.

Let’s look at some of the most popular home loan variants that are worth exploring and are running in great demand for the value they offer.

1. Term loan – “Term Loan” is a regular HOME LOAN product that offers no special benefits beyond funding your house purchase.

In the case of a term loan, you continue to pay a fixed amount of EMI every month for a specific period at a specific rate until the loan ends.

2. Home loan overdraft – The “Home Loan Overdraft Facility” is one of the finest and the most innovative developments in the home loan space.

It can help borrowers save up to 100% of their home loan interest and pay off the loan faster.

For this, they do not have to wait for interest rates to change or make any prepayments at all.

This facility gives borrowers the liberty to transfer all excess funds that are lying idle in their savings account (at a low rate of interest) into their home loan account (at a higher rate of interest) and save interest on the entire amount being saved in this account.

3. Flexi pay loan – Fresh graduates who have recently started their careers may want to buy a house but may not have an adequate salary to secure the minimum home loan they require.

For such individuals, banks have introduced a “Flexi loan” facility where they can avail of a higher loan by up to 20% over their regular eligibility.

These kinds of loans are usually given to young applicants who are below the age of 45.

4. Pre-approved loan – “Pre-approved loan” helps you check your loan eligibility before getting the property registered and incurring major expenses towards stamp duty and registration charges.

There have been several instances where home buyers have suffered huge losses towards payment of government taxes and booking amount before securing the loan.

5. Top-up loan – Top-up loan is an extension of a home loan that is advanced against the property on which the home loan is availed.

It is as good as a personal loan. So, all existing home loan borrowers can avail of it for managing personal expenses like renovating their house, going on a vacation, loan consolidation or starting a business and so on.

Since home top-up loan is backed by collateral, it usually carries a much lower rate of interest as compared to unsecured personal loans.

The funds under a “top up” loan are advanced directly to the borrower where they can use it for any purpose they want except for activities like gambling, trading etc. that are speculative in nature.

However, it should be noted that since this loan is an extension of a home loan, it is available to existing home loan borrowers only.