Types of Home Loans in India: A Simple Guide to Picking the Right One

Buying a home is a big moment. Whether it’s your first house, a place you’re building from scratch, or a dream renovation project — one thing most of us need is a home loan.

But here’s what many people don’t know: home loans aren’t all the same. In India, there are several types of home loans tailored for different goals. Understanding your options can make a big difference in how you plan, apply, and repay.

So, if you’re asking yourself:
“What kind of home loan should I choose?”
This blog is here to help — in simple, clear terms.

1. Home Purchase Loan

Let’s start with the most common type. A home purchase loan is for anyone looking to buy a house — whether it’s ready-to-move-in, under construction, or even a resale flat.

This is the standard loan for:

First-time buyers
Salaried or self-employed individuals
People buying either their primary or secondary residence

Most banks and housing finance companies (including Easy Home Finance) offer this loan, typically covering 75% to 90% of the property’s value.

2. Home Construction Loan

Already own a plot of land? Planning to build your home your way? A home construction loan is what you need.

This type of loan is different from a purchase loan because the funds are disbursed in stages as the construction progresses. You’ll also need to prove legal ownership of the land.

It’s a great option for people who want full control over how their home is built, whether in a city or a rural area.

3. Home Improvement Loan

Sometimes, your home doesn’t need to be rebuilt — just refreshed.

A home improvement loan (or renovation loan) is perfect if you want to:

Upgrade your kitchen or bathroom
Paint the house
Fix a leaking roof or damaged flooring

These loans are usually smaller, get approved quickly, and have shorter repayment periods — perfect for homeowners who want to improve their space without draining their savings.

4. Home Extension Loan

Need more space? Planning to add a new room, a balcony, or even an extra floor?

A home extension loan helps fund structural changes and expansions to your existing home. You’ll need approved building plans and permissions, and the amount you can borrow will depend on your current home’s value.

It’s a helpful option when your home needs to grow along with your family.

5. Top-Up Home Loan

Already have a home loan and need extra funds? Instead of applying for a new personal loan, you can go for a top-up loan on your existing home loan.

This can be used for a variety of purposes — from home interiors to medical emergencies or even higher education — and usually comes at a lower interest rate than personal loans.

It’s simple, fast, and low on paperwork (as long as you have a good repayment history).

6. Balance Transfer Home Loan

If your current lender is charging you high interest or offering poor service, you don’t have to stick around. A balance transfer loan lets you move your home loan to another lender with better terms.

This can help you:

Lower your EMIs
Reduce total interest paid
Possibly get a top-up amount included

Some lenders even waive processing fees to make switching easy — and digital platforms make this move smooth and paperless.

7. Land Purchase Loan

Planning to buy a plot before building your home?

A land purchase loan is designed for buying non-agricultural plots in approved residential areas (within municipal or development authority limits). Keep in mind:

It’s not for agricultural land
The loan amount is usually lower than for home purchases
You’ll need proper title documents and land approvals

This is ideal if you want to buy land now and build your dream home later.

8. Joint Home Loan

A joint home loan allows you to apply with another person — usually your spouse, parent, or sibling.

It’s a smart move because:

You can combine incomes to qualify for a bigger loan
Both applicants get tax benefits
Some lenders offer better interest rates for women co-owners

This type of loan is great for young couples or families planning to invest together.

9. NRI Home Loan

Are you an Indian living abroad and looking to buy property in India?

A NRI home loan is built specifically for NRIs (Non-Resident Indians) and PIOs (Persons of Indian Origin). You’ll need to show overseas employment proof and NRI status, but many lenders — including digital-first platforms — offer paperless onboarding and flexible eligibility checks.

It’s the easiest way to invest in your home country — even from across the world.

How to Choose the Right Home Loan?

Still unsure which loan suits your goal? Here’s a quick guide:

Your Goal	Best Loan Type
Buying a ready/under-construction home	Home Purchase Loan
Building a house on owned land	Home Construction Loan
Renovating or repairing home	Home Improvement Loan
Expanding your home	Home Extension Loan
Need more funds for any purpose	Top-Up Home Loan
Want to switch lenders	Balance Transfer Loan
Buying a residential plot	Land Purchase Loan
Applying with a family member	Joint Home Loan
NRI investing in India	NRI Home Loan