Home Loan

Home Loan Features and Benefits

Home loan offers numerous benefits to the borrower including lower interest rates, tax benefits, flexible repayment time frame and much more. 

1) Attractive Interest Rates

Home loans are accessible at lower interest rates than other types of loans. Obtaining a home loan is better than going for any other loan type to purchase your dream property. Housing loans are offered at cheap interest rates since the lenders do not want to deal with missed EMIs and unpaid dues.

2) Due Diligence Of the Real Estate Property

The finest aspect about housing finance is that the bank will carry it out if you missed out to determine the property's validity. Furthermore, while evaluating the house loan documentation, bank employees conduct legal checks to verify that the borrower is not defrauded. Due diligence evaluates areas where the bank approves the transaction and alerts you if your property purchase is risky in any aspect. 

3) Tax Benefits With Housing Loan

People who have mortgages are eligible for income tax benefits. The deduction of income tax is a fantastic benefit of getting a property loan. It is available for the interest paid on a yearly basis. The amount of interest paid is subtracted from the income tax that must be paid.

4) Flexible Home Loan Repayment Period

Another feature that distinguishes a home loan from other types of loans is the payback period. You can request longer payback terms whenever it is most convenient for you. One can stretch the loan repayment tenure up to 25 to 30 years. The monthly instalments decrease as the repayment period lengthens, easing the EMI burden on the borrower.

5) Availability of Home Loan Balance Transfer

A housing loan allows you to transfer the remaining loan balance from one lender to another. There could be a variety of reasons for this, including interest rates, service fees, an unpleasant customer experience, among others.

6) Capital Growth

As per real estate data, the cost of properties has been constantly rising over the last decade. According to analysts, the capital appreciation of the real estate properties is significantly greater as compared to the paid interest amount. It therefore serves as a lucrative opportunity for property owners as now they can sell them for a higher profit.

Home Loan Overview

A home loan or mortgage loan is a set amount of money borrowed from NBFCs and banks to purchase a property. Purchases of apartments, new houses, and plots are eligible for house loans whereas for renovations, extensions and repairs of an existing home, you can opt for a home loan for renovation purposes. However, when choosing such products, scrutinise home loan interest rate so that the EMI amount doesn’t weigh you down. 

Skyrocketing real estate prices encourage people to take out a mortgage to become homeowners. The most important aspect of a home loan is that when you get it, the lender keeps your property as a mortgage. You must pay the debt amount through monthly instalments to gain complete ownership of the property. The house loan EMI is calculated by the lender using a home loan calculator or home loan cal.

Home Loan Tax Benefits

The repayment of a home loan consists of two parts: repayment of the principal amount and the interest rate. When filing income tax returns, these parts are claimed as a home loan interest deduction or a tax deduction. 

Section 80 EEA allows you to claim tax benefits for the interest component paid on a house loan. This part offers house loan borrowers tax incentives of up to INR 1.5 lakhs on the interest rate they must pay.

Particulars Quantum Of Amount Deduction
Under Section 24

a. For self-occupied property: Rs. 2,00,000

b. For non-self occupied property: No set limit

Under Section 80 C

a. For self-occupied property: Rs. 1.5 Lakhs

b. For non-self-occupied property: Rs. 1.5 Lakhs

Under Section 80 EEA

a. For self-occupied property: Rs. 1.5 Lakhs

b. For non-self-occupied property: Rs. 1.5 Lakhs