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Taking A Personal Loan To Buy A Home


wealthymattersNow the general idea is that a body takes a home loan to purchase a house and a personal loan to defray marriage related expenses ,to take that vacation in Europe etc…..

Home loans are always secured loans. So the rate of interest generally tends to be much lower than almost any category of loan. And then of course for being such a good child ,the government gives you tax breaks too ! But there are cases where a personal loan is your best way forward to become a home-owner. Consider the following cases:

1.A place like Vasai-Virar might be one of the fastest growing regions in the MMR when it comes to lower priced homes that could also potentially make great capital investments. But start making enquiries and you will start finding out that a whole lot of properties are “Collector Passing” and that apart from the odd co-operative bank or the occasional patpedhi, no home loans to purchase such properties is possible from most lenders. Moreover, the interest rates of loans from these sources makes personal loans from major banks look attractive.

2.And if you don’t want to deal with long commutes into the city and are looking for lower priced options in the city, you will sooner rather than later hear the term “Pagdi System”. Rest assured, these Pagadi Properties also won’t be financed by your friendly neighbourhood bank or even all those home finance companies whose sales executives call you up regularly. And no matter the rest of the challenges of living in these Pagdi Properties, its beats living endlessly as a paying guest, or in a hostel or lodge or as a leave and licensee who is expected by landlords to move out every eleven months. In this less than ideal world, a personal loan to buy a Pagadi Property will definitely help you get onto the property ladder and get you a permanent address in the city.

3.Now if you are lucky enough to be well-off enough to not have severe housing problems in Mumbai and would love to move into a home of your own in some settled neighbourhood in Mumbai with nice social infrastructure, your going to come across another problem, banks balk at lending to older resale properties. So you have to depend on your own resources to come up with money to buy your dream home in your neighbourhood of choice. At such times a personal loan where no banker cares too much what is the proposed end use of the loan is an ideal choice to tide you over any shortfall in funds to conclude your purchase.

4.Also if houses built by others or adjusting to houses made to other people’s specifications is not really your thing and you are the independent sort who would rather buy a piece of land in the perfect location and build a house as per your design, you might run into challenges like not every plot of land can be financed by bank loans or that banks won’t lend money to construct your flat if the housing society has not yet allotted flat numbers.Then you have no other choice but to either wait and save up, dispose off other assets to raise funds or simply take a personal loan to get started in building your dream home.

So don’t overlook personal loans while considering financing options to becoming a home-owner.

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About Keerthika Singaravel
Engineer,Investor,Businessperson

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