Thinking of buying your own house? A home loan is the road to take for several reasons. We have listed the most important ones here to help you make an informed decision.
Flexible repayment schedules
The repayment period for home loans is long, usually exceeding 10 years. This allows you to spread your repayment plan over a tenure that is comfortable for you. You can also choose to settle your loan before the tenure ends by prepaying a lump sum. Your lender may levy prepayment charges, depending upon the terms of your agreement.
Enjoy tax benefits
A home loan makes you eligible for certain tax benefits that can save you a lot of money. Section 80C of the Income Tax Act, 1961, allows tax deductions on any principal repayments up to Rs.1 lakh made on loans taken for residential property.
You can also seek tax deductions of up to Rs.1.5 lakh on the interest payments you make. Even the processing fee you pay while applying for the loan is treated as interest, which means you can deduct it from your taxable income. It makes sense, therefore, to go for a home loan instead of self-funding your purchase.
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 until the repayment tenure ends. A floating interest rate fluctuates according to prevailing market conditions. Select the type of interest rate that will benefit you in the long run.
Rapid capital appreciation
Judging by the demand for housing in India, real estate investment can turn out to be quite lucrative for you in the long run. Rents and construction costs have been rising rapidly over the last few years, and this trend is likely to continue.
The best time to invest in real estate is now because it is an asset that can only appreciate.
You can apply for a home loan online from the comfort of your office or residence. Bajaj Finserv approves your online home loan application in just five minutes*. Moreover, if you’re a salaried individual, you incur a processing fee of only 0.8% when you apply online.
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