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Best 7 Home Loan Benefits

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Best 7 Home Loan Benefits

Tax Benefits: – In order to encourage more and more people to buy their own homes, the Government of India offers tax benefits on the principal amount as well as the interest paid on the home loan, along with tax deductions. 5 lakh on home loan repayments in a financial year under Section 80C of the Income Tax Act, 1971. Eligible to claim deduction up to Rs. Whereas under Section 24B of the Indian Income Tax Act, the interest portion is taxed at Rs.2 lakh. Deduction is allowed up to Rs. Deduction under Income Tax is available only after the house is constructed. You cannot claim income tax deduction during the construction of the house.

Tax benefit on second home: In case of a second home, you are eligible to claim a deduction for the entire amount of home loan interest paid under Section 24B of the Income Tax Act.

No pre-payment charges: Unlike other loans where banks charge pre-payment penalties on payments made towards home loans, there are no pre-payment penalties on floating rate home loans. So, whenever you have surplus money, you can use it to make payments towards your home loan and reduce your burden. However, there will be pre-payment charges in case of floating rate home loans.

Balance Transfer Facility: If you have taken a home loan from one bank or lending institution, you can transfer it to another bank or lending institution and pay at lower interest rates.

Longer Repayment Tenure: Home loan has the longest repayment tenure of up to 30 years among all loan types, so one can reduce the EMI burden by extending the loan tenure. Use our home loan EMI calculator to know how the EMI changes as the home loan tenure increases.

Enjoy capital appreciation: After taking a home loan, the value of the property you bought will appreciate over the period you repay it, thus making you profitable irrespective of the loan repayments.

Saves you from paying rent: As rents are high in metro cities, they put pressure on your monthly budget. Hence it is better to pay home loan EMI at the time of rent.