Types of Home Loans: Which One Is Right for You?


Posted April 17, 2019 by inrcredit

Loan is basically defined as any amount of cash that one borrows and has to pay back in time, unfortunately with some added rate of interest.

 
Loan is basically defined as any amount of cash that one borrows and has to pay back in time, unfortunately with some added rate of interest. The terms may however vary, depending on where you get your loan from and how much loan amount you have taken. If you are taking loan from a bank, you may have to pay an extremely high rate of interest. There are many other variations by how a lender structures the loan.

Line of credit loans: this is one of the handiest loan for a small business. It is a short term loan which extends the cash for your business. These are intended for purchase of inventory as well as to cover up for the operating costs. This loan however is not intended for purchase of real estate or any large equipment.

Instalment loans: this loan covers both the principal amount as well as interest. Once you sign your contract, you will receive complete amount and the interest to be paid will be calculated from the date to final day of the loan. There will be no penalty charged if you repay an instalment before the final date.

Balloon loans: these loans are often taken in situations where in a business has to wait for a specific date before the receive the payment from a client for product and services rendered.

Interim loans: these loans are often used by contractors and builders to build new facilities. The property is kept as a mortgage to pay off the interim loan when the construction of building is finished.

There are many organisations that offer loan, some of which are not banks but finance houses and money trusts. Many borrowers in the past did not understand what they were signing up for when taking these home loans and hence found themselves in deep trouble later. To avoid this, one has to first understand what type of loan they are going for. Here is some different type of home loans prevailing in the market:

Loan with fixed rate: this one is considered to be the safest type of home loan since this lets the borrower that a loan at pre-decided rate of interest for the entire tenure. This means even if the tenure is 30 years, the EMI amount will remain the same till your last repayment. This is by far the best possible home loan for salaried persons.

Adjustable-Rate Mortgage Loans – These loans have one thing in common and that is that the payment will increase over time. It offers a very low rate to lure the customer by offering home loan on cheapest EMI for first few years but with larger payments due as the interest rate changes, an adjustable home loan rate can be hard to repay, especially if the payments go double within few years itself.

When buying a home loan, most home purchasers choose to finance a portion of the total amount through home loans. An online home loan eligibility check can give you answers to your questions about loan variables and their changes. This helps a person determine how much he can payback on monthly basis.

Source: https://www.freeprnow.com/pr/types-of-home-loanswhich-one-is-right-for-you
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Issued By INRCREDIT
Country India
Categories Loans
Tags home loan for salaried persons , home loan on cheapest emi , online home loan eligibility check
Last Updated April 17, 2019