Home Extension Loan - Eligibility, Duration, Interest Rate

Several first-time home buyers in India tend to settle for a home that fits within their budget. It is a wise decision too. After all, you cannot keep waiting until you gather sufficient funds to buy your dream home. You can move into a larger, more spacious home later in life as your financial condition improves.Need for a bigger home is felt when you get married, you have additional family members living with you or when your kids grow up. You may need an additional bedroom or a room to be used as a work-station. Whatever be the purpose, this would be the right time to avail home extension loan .If you are not sure of the home extension loan meaning ? It is the credit availed to extend the space of your existing home. It is a much practical solution to buying a new home as the capital required for home extension would be much lesser. Today, all the major banks in India offer this type of loan, and it helped many homeowners in India.

Eligibility

Anyone can apply for an extension loan, provided you can repay the amount within the stipulated duration and has a good credit score . If you have already availed a home loan , you can still apply for an extension loan. The time taken for the disbursal of this loan is much lesser than home purchase loan as the documentation process is quite simple.

Duration

You need not worry about repaying the home extension loan in a hurry. Most banks in India provide home extension loan for 15-20 years. However, you must know that the banks decide the tenure based on the age of the applicant at the time of application and the amount due on the existing home loan. You can use tools like the home extension loan calculator to exactly know how many years would you need to repay the loan in full based on your financial condition.

Interest rate

One of the most important factors to consider before applying for any loan is the interest rate. The interest rates for home extension loans are similar to the home purchase loan. However, the banks consider the nature of income, source of income and age of the applicant for determining the interest rate.So, if you want to add a new room in your home, a home extension loan is a great way to fund the project.You get plenty of time to pay back the dues and you can avail home extension loan tax exemption India on the interest payable under section 24 of the Indian Income Tax Act.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.