Key Benefits of Taking a Home Loan
Buying a house is one of the biggest investments for most people in India. It is like buying or owning an asset that is going to keep appreciating its value with time. However, the ever-increasing property prices make it difficult for most people to buy their dream homes. This is where a home loan can help you fulfil your dream of purchasing a house by funding up to 80% of the cost of the property. A housing loan provides people with the courage and confidence to buy their dream house without straining their finances. There are many banks and private companies offering affordable home loans for buyers. Here we talk about some of the key benefits of taking a home loan.
Affordability to Buy Your Dream House
The home loan makes it easier and affordable for middle-class salaried or self-employed to buy their dream house. If you have a source of regular income and can pay off the EMIs, all leading banks and NBFCs will quickly approve your loan application. Also, the low-interest rates of home loans and longer tenure, from 20 to 25 years with smaller EMIs, make it easy for homebuyers to repay the amount without affecting their budget and financial plan.
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Numerous End-uses of Home Loans
Many leading banks and Non-Banking Financial Companies (NBFC) provide home loans for different purposes like plot purchase, home construction and renovation. So, you can apply for a home loan to buy any plot or ready-to-live house you like. Also, you can use the amount to build a new house on land you own or renovate or remodel your home. So, a home loan can serve different purposes, as per your requirements. Also, you can apply for a house loan against a property too.
Tax Advantages
Another big advantage of taking a home loan is that you will get tax benefits. You can claim a tax deduction on both the principal and the interest amount of the repayment. For repaying the principal part of the home loan, you can get the exemption of a maximum of INR 1.5 lakhs under Section 80C. For the repayment of the interest amount of the loan, you can claim a tax deduction under Section 24B, a maximum of up to INR 2 lakhs. So, when you buy a house on loan, these deductions can be a huge amount in terms of evaluating your total annual tax commitment.
Flexible Interest Types
Home loans come with lower interest rates as compared to other types of loans in the market. In addition, these loans are available with both fixed and floating interest rates. So, you can select your preferred interest type according to your needs. In a fixed interest rate, the EMI remains the same during the loan tenure. But, in a floating-interest Home Loan, the EMI is determined by the applicable interest rates in the current market. So, if the demand for a home loan is low in the market, the floating interest rate EMIs gets reduced significantly.
Build Credit Score
A home loan can give you the chance to build or improve your credit scores. When you opt for a home loan and continue repaying the amount in time, it helps maintain your CIBIL score well. The lenders will consider you a liable and safe borrower who makes payments on time, improving your eligibility for applying for other loans, as per your needs. You can make the most of this opportunity and apply for a loan at more affordable interest rates in the future.
In addition, home loans are the only loan types where you get a longerget longer repayment tenure of up to 30 years. It actually reduces the burden of your EMIs by increasing their tenure.
So now that you know the top advantages of a home loan, you can apply for a home loan or a house loan against property from a leading bank or NBFC. Make sure to compare different options to be able to find the right loan offer.
