A home loan can be of great financial assistance in owning your dream home. It can finance up to 90% of the total purchase price, making it easy to become a homeowner. Besides, purchasing a property is also a significant financial decision in a person’s lifetime. It can provide a financial safety net for the future.
If you’re worried about financing the purchase, you should know that it has become straightforward to get a home loan in India, with simple housing loan eligibility criteria and only essential paperwork. So, don’t wait any longer to become a homeowner. Here’s a look at five great reasons why a home loan can be a great idea to fulfill your aspiration of buying a home.
Buying a Property vs. Paying Rent
While paying house rent counts as an expenditure, buying a house is an asset building. It also provides you security and a sense of accomplishment. Why spend the rent on building someone else’s bank account when you could pay almost the same amount as EMIs for a home loan and acquire a valuable asset?
Did you know that a home loan can offer you significant tax benefits? Under Section 80C of the Income Tax Act, you are eligible for tax deductions on loan repayments. In addition, under Section 24A, you could get a tax deduction of up to ₹ two lakhs. Also, schemes like the Pradhan Mantri Jan Dhan Yojana have made purchasing a home much more accessible for people of all income groups.
Flexibility of Repayment
In terms of repayment, these loans provide a great degree of flexibility. You are free to choose a tenure of up to 30 years when you apply for a loan from the best bank. A longer term means that the EMIs you pay each month will be lower than those for a shorter tenure.
Loan Prepayment Facility
Some banks offer the facility to shorten your repayment tenure if you come into some money, such as a salary hike. So, make sure to check for prepayment terms before you apply for the loan and use an online home loan prepayment calculator to get an estimate of how much interest you can save via prepayment.
Balance Transfer Facility
This facility allows you to earn benefits at the interest rate on your EMIs. Transferring your loan to a bank offering a lower interest rate can help you save money and reduce the repayment burden. You can also use a home loan calculator part payment to check how this would impact the amount you need to repay.
A home loan can play a very instrumental role in helping you achieve your goal. If you can’t finance the purchase of your house upfront, it provides you with ample support and time to accomplish your dream. Some banks have also expanded their criteria to make their services accessible to a more extensive customer base. For instance, it has been molded to suit the unique requirements of self-employed citizens. And don’t forget, you get great tax benefits on home loans.