A well-managed home loan can make one of most peoples’ biggest dreams come true, which is to have a place of their own. A home loan helps provide the finances required to buy a house, which means there is no need to exhaust your entire savings. However, some people are still unsure about getting such loans.
If you are not familiar with home loans, look at some of the key benefits of applying for one:
- It is possible to get low home loan interest rates
Currently, home loan interest rates have never been lower. They have reached a standstill and are not expected to decrease any further. So, this is a good time to apply for home loan and get a low interest rate before it starts rising once again.
- Lenders offer suitable repayment tenures
A home loan usually involves a big amount. This is why lenders offer borrowers repayment tenures that are suitable to be paid in monthly instalments. If you are looking to save money on the interest, it is advisable to go for a short repayment tenure and cut down the total number of monthly instalments. However, go for a long tenure if smaller EMIs are a more convenient option based on your monthly income.
- Taking a home loan has tax benefits
Did you know that taking a home loan makes you eligible for tax benefits? According to Section 80C of the Income Tax Act of 1971, an individual can claim up to Rs 1.5 lakh as a tax deduction on principal amount repayments. Also, under Section 24, you can claim Rs 2 lakh as tax deduction on the home loan interest.
- A home loan provides the opportunity to boost your credit record
Taking a house loan offers borrowers a great opportunity to boost their credit scores. Of course, this includes paying all the monthly instalments on time without any defaults. Clearing all loan payments on time will improve your credit score, which is always beneficial if you need another loan in the future. This is why it becomes so important for you to use a home loan EMI calculator, which will help in showing the EMI results. Based on these results, you can decide whether it would be easy for you to pay the loan or look for better options. Also, this will help decide whether the home loan interest rate is affordable. If you feel like the EMIs are high because of the home loan rate, it is best to consider other loan plans by various lenders before choosing one.
So, these are the advantages of applying for a home loan. If you are looking to learn more in detail about a loan plan, feel free to get in touch with a financial institution’s representative who will take you through the entire process. Also, make sure to inquire about the documents required for home loan, as the requirement could differ from lender to lender.