Housing Loan

A housing loan is the type of loan that majority of the population choose to go for, it is a sum of money borrowed from a financial institution such as a bank to buy a house. Home loans consist of a flexible or established interest rate and payment intervals.


There are various types of home loans that you can select from, it depends entirely on your as in the borrower’s needs:

  1. Home Purchase Loan:  It is a basic type of a Housing loan which is used for the purpose of buying a new house.
  2. Home Improvement Loan: If you are in need of refurbishing of your house, or want to make any kind of renovations

with established contractors then you can apply for this loan.

  1. Home Extension Loan: If you have already taken a loan and you want to extend or expand it then this is the one to apply for.
  2. Home Conversion Loan: a type of loan which you can apply for if you have already taken a housing loan to finance your current house, but now you have a made the decision to move to another home.
  3. Home Construction Loan: This is a loan suitable if you want to start construction of your home and need capital for that.


Choosing whether to go for a loan or not can be hard decision to make, let’s go through few of the advantages as well as disadvantages of home loan so you will have a perfect idea of what you are getting into:


  • Apart from the sentimental value of purchasing your own house. The amount of money that you utilize to build your house is the biggest and largest investment you are going to make and it is something that you can use if you ever need it.


  • You will be shielded from the inflation for a long term if you choose to make your house one of the investments, as you have to keep up with the times. This is one of the benefits that will help you the most.


  • as purchasing a house using a home loan is a long-term process, you will be able to notice the rise and fall of interest rates. The falling rates will help you in paying your loan sooner and you can be the owner of your house.



  • It is a long-term commitment that ranges from 8 to 15 years, and you will have to hold off any other serious commitments like having a child or having a lavish wedding as you will be paying off your loan for that time, even the hike in salary is not that helpful.


  • whenever interest rates increase then the banks increase the loan tenure as well rather increasing EMI thus your interest component increases in EMI. Sometimes it doesn’t work in your favor


You must have noticed that some of its advantages can quickly turn into disadvantages, it is safe to assume that there is a risk in all kind of loan, it completely your decision and it should be made by having a solution if the risk came to pass.