A home is always a place of peace, joy, and love. It is where you prefer to be after a long tiring day. It brings with it a sense of identity, status, and financial security. Having a home means a lot to anyone, and buying or constructing one can be one of the most crucial decisions one can take in his life.
To own this sense of ownership, peace, status, and freedom, you do not need to put a lot of burden on your savings or investments. You can still buy a home if you are short of funds by applying for a housing loan in India. A home loan makes your dream of owning a home come true without constraining your finances.
Numerous benefits come with a home loan, such as the tax benefits on interest and the loan amount. The lower interest rates and flexible repayment tenure help you plan your monthly budget as per your needs.
Here are the top benefits of availing of a housing loan in India:
– Multiple Property options
Buyers have multiple property options in the affordable home segments based on their budget. For instance, if you have a stable and recurrently increasing salary, you can afford a larger space for your home. You can also purchase a home based on your budget. Housing loans in India are specific to the buyer’s needs.
Lower interest rates
Compared to other loans, a home loan is an affordable option as the interest rates are dropping every year. The lower the interest rate, the lower EMI you will have to pay. A lower EMI is what makes a home loan attractive and affordable. It enables you to plan your budget and focus on other financial obligations at home.
– Tax deduction benefits
The government of India provides tax benefits to home loan borrowers. The purpose is to encourage more and more Indians to purchase their own home. You can claim up to Rs. 1.5 lakhs deduction in a financial year under the section 80C of the Income Tax of India Act 1971, and tax deduction of up to Rs. 2 lakhs is allowed on the interest paid under section 24B of Income Tax of India Act.
The deductions are available only when the construction of the house is complete, which means that you can claim them while constructing your home.
– Deduction benefits of the second house
Another benefit of acquiring a home loan is that if you buy your second home, you are eligible for deductions under section 24B of the Income Tax Act 1961. You can claim a tax deduction for the entire interest amount paid under the housing loan.
– No prepayment charges
In other loans, borrowers need to pay prepayment penalty charges for paying the home loan amount in full before the due date. However, you will not have to bear the prepayment penalty if you opt for a floating rate housing loan in India. So, whenever you have a surplus amount from your salary or business profit, you can choose to prepay your home loan amount and lower the financial burden.
– Balance transfer
You may find a lender in the future who provides better deals than your current lender. You can quickly transfer your home loan balance to a different lender who offers a lower interest rate and flexible repayment tenure. However, you will have to assess the benefits first via an online balance transfer calculator.
– Plan your EMIs
Before applying for a housing loan in India, it is paramount to assess your needs first and see how much you need and how much you can afford to pay as EMIs. Knowing your EMIs in advance enables you to plan your budget and gives you the confidence to repay the loan amount within stipulated EMIs.
Every lender has an online home loan EMI calculator, which you can utilize to calculate your EMI. It requires you to add three values; the loan amount, interest rate, and loan tenure. You can alter the values numerous times until you reach a suitable EMI.
– High loan tenure
Compared to all other loans in India, a home loan on EMI has the longest repayment tenure. It can range between 15 and 30 years, allowing borrowers to repay the loan amount with interest without any default. You can choose the loan tenure as your needs. However, you should note that your loan tenure is subject to factors like your age, income, and current financial obligations.
A housing loan in India is the best option to achieve your dream of owning a home without redeeming your savings. Nonetheless, it is crucial to assess your needs and finances before applying for a home loan on EMI.