Taking a home loan is a big financial responsibility. It requires careful financial planning. But, if managed well, it can make your long-cherished dreams of being a homeowner come true. Applying for a home loan is also a very practical way of getting the desired funds as you can repay the amount in smaller instalments over a long period.
Besides, today many financial institutions in India offer a wide range of home loan products to suit your varying needs. For example, if you want to build your own home, you can apply for a home construction loan rather than the regular home purchase loan. Apart from getting a loan for buying and constructing a home, you can also get a loan for home renovation, and home extension.
Let us look at some of the benefits of taking a home loan
Opportunity to grow your money
Even if you have sufficient savings to buy a house, experts recommend taking a home loan to fund the fund home purchase. This will not only help you get tax benefits every year till the end of the loan term, but you also can grow your savings and build a bigger corpus for the future.
You invest the amount in different schemes of your choice and let your money grow. There are many investment tools that allow you to grow the savings with compounding effects. This means you can get inflation-adjusted returns.
When you apply for a home loan, the lending institution exercises due diligence and thoroughly verifies the property-related documents and even conducts a physical inspection before sanction. This greatly reduces your risk of buying a property that may be under a legal dispute. So, when you apply for a loan that the lender has already approved, you can be relatively sure that it is a safe project to invest in.
Access to smart financial tools
Today, almost all the lenders have EMI calculators on their website. It is a handy online tool that allows you to plan your finances and manage repayment more efficiently. The tool allows you to compute the EMI payable beforehand for the amount you borrow so that you can prepare your budget accordingly.
The calculator is easy to use. All you need to do is insert the details in the tool and it will automatically compute the EMI and display the exact amount on your screen. You can even change the input multiple times and decide the maximum amount you can borrow so that the EMI is affordable.
Apart from allowing you to get the funds for buying the property you want; home loans also let you get tax benefits every year. The premium amount you repay to the lender every year is eligible for tax benefit under Section 80C of the Indian Income Tax Act. You can get a deduction up to Rs. 1.5 lakhs in a financial year. Also, the interest repayment of home loan is eligible for tax benefit up to Rs. 2 lakhs under Section 24D of the IT Act.
Thus, taking a home loan has many advantages. It allows you to enjoy the sense of accomplishment of having your own space and securing your loved one’s future. Compare the offers from different loans and choose the best offer that suits your needs.