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Today, most people take home loans to buy houses. Most banks offer adjustable home loans to customers, whose interest rate keeps changing with time. But this is not the only option of home loan in the bank, apart from this, the bank offers two more types of loans. However, it is mostly seen that the banks themselves do not give this information to the customer. According to HDFC, the bank has 3 types of options to take a home loan. Know the types of home loans here.

The first type of home loan is an adjustable or floating rate loan. Most banks give loans to the customer according to this. In this type of loan, the interest rate is linked to the lender's benchmark rate. If there is any change in the benchmark rate, then the interest rate also changes in the same proportion. Overall, the interest rate of this type of loan keeps changing from time to time.

You can understand the fixed rate loan from the name itself. In this, the interest rate is fixed at the time of taking the loan. The same interest rate remains applicable during the entire period of the loan. There is no change in it.

You may or may not have heard about combination loan. In this type of loan, a part of the loan is available at fixed interest rate and the rest at adjustable or floating interest rate.

If you hope that interest rates will come down in the coming days, then you can choose a floating rate loan. In such a case, the interest rate applicable on your loan will also decrease. One advantage of floating rate home loan is that when you make a prepayment, you are not charged a prepayment charge, whereas if you want to close the fixed rate loan before time, then the bank charges you a prepayment charge.

The advantage of choosing the option of fixed rate home loan is that at the time of taking the loan, you know how much EMI you have to pay. Whether the repo rate increases or decreases, your interest rate does not change. If you expect interest rates to rise in the future and thus want to lock in your home loan at the current rate, then you can opt for a Fixed Rate Home Loan. Fixed rate loans usually cost a little more than a floating rate loan. If the difference is negligible, you can opt for a fixed rate loan. If it is large, you can consider a floating rate.

If you are not sure which type of housing loan is right for you, fixed or floating, then you can opt for a combination loan which is partially fixed and partially floating. This is especially good for you if you are currently repaying another loan and your cash flow is planned to meet your loan obligations for the first 3-5 years. During this term, you can opt for the fixed rate. After this phase, you can opt for the floating option for the remaining term of the housing loan.