Benefits of home loan
A home loan certainly is a liability however, buying a home entirely with your savings is not possible. Home loan benefits can’t be overlooked. It is a huge amount and involved a long tenure but as stated above its blessings can’t be neglected. Buying a home is a mental process and can cause apprehension and anxiety in anyone. It also brings a huge sense of accomplishment. However, availing home loan does help in all.
Experts believe even if you have the sums to purchase the property in one go, it is better to take a home loan. Instead of spending a lump sum amount on the property, it is better to go for a large amount down payment and pay off the remaining amount in a higher amount, monthly EMIs since you can afford it.
Below are the advantages of availing of a home loan:-
1. Tax benefits under home loan:- A home loan is possibly the biggest tax-saving instrument, thanks to a number of tax deductions available under Sections 24, 80C, and 80EEA of the Income Tax Act. Together, an eligible home loan borrower can claim a total tax deduction of up to Rs 5 lakh ( Rs 1.5 lakh on principal repayments under Section 80C plus Rs 2 lakh on loan interest component under Section 24 plus Rs 1.5 lakh on loan interest component under Section 80EEA if he meets the eligibility criteria) which can help him reduce his tax liability by Rs 1.5 lakh if he falls under the 30% income tax bracket.
2. Balance transfer facility:- In the case of a home loan you have the facility to transfer your home loan to a different lender if he is giving you the loan at a lower interest rate.
3. Facilitate buying your dream house:- Since buying one own house involves a huge sense of accomplishment for many people buying a house with own money is not possible, home loan as it can be repaid in easy monthly installments makes it easier to buy a house.
4. Saves you from paying rent:- Rent in metro cities is significantly quite higher. Paying rent put tremendous pressure on your monthly budget. It is better to pay the EMIs and own a house.
5. Sense of accomplishment:– Purchase a house is the single biggest purchase in most people’s lives. Once you own a house, it also brings a huge sense of accomplishment to you therefore, for those people who can’t afford to buy a house in one go, home loans facilitate it for them. The sum that most of us sink into our home does make it the largest component of our portfolio investment.
6. Low-interest rate:- Buying a home is a long-term decision over a 10-year period, the interest rate may go through several up and down cycles. Therefore, you can be sure that you will benefit from falling rates at some point in the cycle.
There could also be a situation in which interest rates fall, allowing you to prepay your loan and own your home.
