In recent years, the number of home loan borrowers has increased significantly. This increase is due to several reasons. Home loan is on top of this. The number of home loan borrowers has increased considerably due to many excellent schemes brought by the banks for the customers.
There are many customer friendly home loan schemes, whose eligibility criterion is very easy, interest rates are low for women. Also, there is no EMI till the position and many discounts are included in the offer period. Let us now discuss the benefits of taking a home loan under the existing laws, which have made this option popular for customers.
What are the benefits of taking a home loan
You get a property
Buying a house is not an easy task. This is the biggest financial commitment of your life. You have to pay EMIs, which are very heavy on your pocket. But the happiest thing apart from this is that you get your own house, you get a property that gives you some comfort. Buying a house is seen as an investment, which can make your future secure.
Low interest rates
Home loans are secured loans, which have a lower interest rate than unsecured loans. The term of home loan can go up to a maximum of 30 years and a minimum of 10 years. Interest rates can go up and down but it will not be very much like an unsecured loan. Generally, the interest rate of home loan ranges from 7.35-8.50 percent. So in this way you can be sure that you are getting a good deal by taking a home loan.
Tax rebate on interest repayment
One advantage of buying a home loan is that with this you also get tax exemption. Under section 24 (b) of the Income Tax Act, you can get a rebate of up to Rs 1.5 lakh on the total interest paid on a home loan after one year of buying or building a property. The interest paid on the home loan taken before the acquisition or for the period after construction is repaid in five equal annual instalments. It will start from the year in which the house has been acquired or constructed.
Tax rebate on principal repayment
Under Section 80C and 80CCE of the Income Tax Act, 1961, you will get a rebate of up to 1 lakh every financial year on the principal repayment of up to one lakh rupees on a home loan. The deduction will be from the total income, which will be made under fulfilling the prescribed conditions.
Second house tax exemption
Even if you are buying a second house, you can still get tax rebate on the interest paid on the amount of the home loan. This exemption is possible under section 24 of the Income Tax Act.
No pre-payment penalty
If a customer pays the loan well in advance, then the lenders also charge prepayment charges. But in case of home loan there is a lock-in period, which is different for each lender. If you make a home loan payment after the lock in period, then there is no charge. Apart from this, there is no pre-payment charge on the floating rate of home loan. Therefore, if the customer has more money, he can repay the amount of the home loan well in advance to reduce his financial burden.
Although there are many benefits of a home loan, but it is a very big financial decision and you have to take a decision very carefully. Remember that you have to take a loan according to your ability and do not miss any EMI. Before choosing a home loan lender, compare it with other options available in the market.