Home Loan
Home Loan
As the name suggests, a home loan is the amount of money an individual borrow from banks or other financial institutions after meeting certain loan eligibility criteria to purchase a residential or commercial property. The money borrowed has to be paid back to the lender in easy monthly installments (EMI) at a particular rate of interest. There are many banks and financial institutions that offer loans to help you buy or construct your dream home. Loans are also available for renovation or extension purposes.
Loan Eligibility
Loan eligibility refers to how much money you’ll get to buy a house and whether or not you’re eligible for a loan. To determine your home loan eligibility, certain factors must be considered, such as the applicant’s age, income, type of employment and property, credit score, and many others.
Benefits of Home Loan
Tax Benefits: A borrower can claim an Income Tax deduction of up to Rs. 1.5 Lakh under section 80C of Income Tax of India 1971 Act. While Section 24B of the Income Tax Act of India allows for a deduction of up to Rs 2 lakh on the interest portion. The income tax deductions are only available after the house has been completed. You cannot claim income tax deductions while the property is being built.
Tax Benefit on Second Home Loan: If you buy a second home, you will be eligible for an Income Tax deduction under section 24B of the Income Tax Act.
Home Loan Balance Transfer: It gives you the benefit of a balance transfer to another lender with a lower interest rate.
Ease to Buy a New Home: It makes it easy to buy a new home with one’s own money because It makes it easier to buy a house because it can be repaid in easy monthly installments.
No prepayment Charges: It has the highest repayment tenure that goes up to 30 years and by extending the loan tenure one can reduce the EMI liabilities.
