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Here's why you should opt for a home loan

  • Highlights

  • Home Loans last for long periods of time, usually exceeding 10 years.

  • You become eligible for certain tax benefits

  • A real estate investment can turn out to be quite lucrative for you in the long run

If you’re thinking of buying your own house, then you may be wondering about the advantages of taking a home loan. Here they are:

Flexible repayment schedules

Home loans last for long periods of time, usually exceeding 10 years. This means that you can plan your repayment in an appropriate manner, taking the long tenor into consideration. You can also choose to close your loan before its tenor by prepaying the remaining debt. However, your lender may levy prepayment charges, depending upon the terms of your agreement.

Rake in the tax benefits

By taking a home loan, you become eligible for certain tax benefits that can save you some serious cash. According to Section 80C of the Income Tax Act, 1961, any principal repayments up to INR 1 lakh are tax deductible every year. However, this rule applies only to residential property owners.
You can also seek tax deductions on the interest payments you make, restricted to a maximum of INR 1.5 lakh per annum. Even the processing fee which you pay while applying is treated as interest, meaning that you can deduct it from your taxable income. This is another reason why should apply for a home loan instead of trying to fund your home purchase out of your own pocket.

Choose the interest rate that suits you best

A home loan comes with either a fixed interest rate or a floating interest rate. A fixed interest rate is set at a certain figure when you take the loan, and remains the same till its completion. A floating interest rate, on the other hand, fluctuates according to the prevailing market conditions. Depending upon your requirements, you can choose between a fixed-rate loan or a floating-rate loan.

Factors to consider before taking a Home Loan

Rapid Capital Appreciation

Judging by the demand for quality housing in India, a real estate investment can turn out to be quite lucrative for you in the long run. Rents as well as construction costs have been rising relentlessly over the past few years, and this trend is likely to continue in the future.

You can also apply for a Home Loan over the internet, from the comfort of your own office or house. It doesn’t take much time to obtain an online Home Loan in India. For instance, Bajaj Finserv approves your online Home Loan application in just 5 minutes. Moreover, if you’re a salaried individual, you incur a processing fee of only 0.8% when you apply online. To know more, click here.

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