Home Loan
Home Loan
A home loan, as implied by its name, is a sum of money that an individual borrows from banks or other financial institutions after meeting specific eligibility criteria to acquire either residential or commercial property. The borrowed funds are subsequently repaid to the lender through manageable monthly instalments known as EMIs, which include a predetermined interest rate. Numerous banks and financial institutions provide these loans to facilitate the purchase or construction of your desired property, and they are also accessible for renovation or expansion purposes.
Different Types Of Home Loan
1
Home Loan
This is the most common loan type for property purchase, allowing you to secure up to 80-90% of the property's market value in the form of housing finance.
2
Home Renovation Loan
Designed to finance home improvements or renovations to enhance your property's condition.
3
Home Construction Loan
Utilized for the construction of a new house from the ground up.
4
Loan Balance Transfer
If you're dissatisfied with your current lender's service, you have the option to transfer your outstanding loan balance to a different lender offering more favorable terms, including a lower interest rate. You can also explore the possibility of a top-up loan on your existing loan after the transfer.
5
Composite Home Loan
This type of loan combines funding for both the land plot on which you plan to build a house and the construction itself into a single, comprehensive loan.
Benefits Of Home Loan
Home Loan
Tax Benefits: Home loan borrowers can claim tax deductions under the Income Tax Act of India. Section 80C allows for deductions of up to Rs. 1.5 lakh on the principal amount, while Section 24B permits deductions of up to Rs. 2 lakh on the interest portion. These deductions become applicable once the house is completed; they cannot be claimed during the property's construction phase.
Tax Benefit for Second Home Loan: When purchasing a second home, borrowers are eligible for an Income Tax deduction under Section 24B of the Income Tax Act.
Home Loan Balance Transfer: Home loan balance transfer offers the advantage of moving the loan to another lender with a lower interest rate.
Simplified Home Purchase: Home loans simplify the process of buying a new home by allowing repayment in manageable monthly instalments.
No Prepayment Charges: Home loans typically offer extended repayment tenures, often up to 30 years, providing the flexibility to reduce EMIs by extending the loan tenure.
Elimination of Rent Payments: Home loans enable you to own your own home, eliminating the need for rent payments. Paying EMI for your own home is often a more financially favorable option.
