Home Loan Tax Benefit – Is It Worth it?

The home loan includes attractive tax benefits, which has been a welcome advantage. But, to take a home loan with the prime objective of enjoying tax benefits is something which needs a bit of assessment.

For this let’s first look into the available deductions for a home loan;

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a) The interest payment of the home loan is exempt u/s24, up to Rs. 2 lakhs in a year if the property is self-occupied. In case the property is rented then the exemption is available up to Rs. 2 lakhs net of taxable rental income.

b) The principal repayment of the home loan is available for deduction u/s 80C along with various other payments like LIC, FD, PPF, tax saving MF etc., for the amount up to Rs. 1.5 lakhs.

The stamp duty and registration charges are also exempt from tax.

Considering the rising prices of real estate in the present scenario, the government has made attempts to make home loan cheaper. But still, there are high chances that your loan amount could be so high that the interest exemption limit of Rs. 2 lakhs fall short. Also, the principal repayment deduction is clubbed with other payments, thus, it is definitely not able to cover for whole payment.

Therefore, taking a home loan is beneficial when you are facing a shortage of funds, in case you have enough funds for the desired property than going for a home loan will not give you enough returns on your investment.

READ:- Tax Benefit on Home Loan – Is It Worth it?

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Design your living room in amazing way

We all spend a lot of time in our living room, so it not only needs to look great but should be comfortable and spacious. Your living room should work as a space for entertainment and relaxation. You can make your living room a perfect place by understanding different aspects that go into designing it. Colour scheme is one of the most important aspects of designing. A common rule while deciding on color is that it has to be from a neutral palette which is based on beige, black and white. Next, if your living room has a natural focal point such as a fireplace, consider designing around it. Face the seating towards the focal point to have a clear view. If there isn’t a natural focal point, you can create one. Also, avoid putting furniture too close to an entryway.

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Focus on using as much natural light as possible. However, don’t rely on a single source of light to your living room and try to blend several layers of light from multiple sources. Upgrade your living room with sleek TVs, PCs, and speakers. If you want to increase the visual space of your living room, consider adding a mirror. Be strategic when adding the mirror in your living room – hang them at eye level so they reflect your artwork, furniture and so on.

Rugs can also make the room look comfortable. In conclusion, these points can be constructive when you are looking to design your living room. Remember, if you have a running home loan and you are in urgent need of funds to design your living room, you can approach any bank or NBFC. They can offer top-up loans to fulfill your dreams. You also have the option to apply for home improvement loans if you are looking to renovate your house.

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You can apply for the loan both online as well as offline. You can also compare the interest rates offered by different lenders through various fintech lenders and choose the one meeting all your requirements.

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Learn how technology is making things easier to get home loans

The advent of online technology has made the online process much easier and reliable. It has shaped a lot of industries in modern times and it also includes the banking sector. Not only has it become easier to apply for a home loan but the process has also become faster and smoother as well. Let’s take a look at how technology has helped people to get home loans easily. Firstly, it helps to decide if your loan application would be accepted or rejected. This process used to be manual. Now, thanks to technology, this process is taking place instantly. Banks and other financial institutions can right away point out if you can get a home loan based on their credit policy and other regulations. Next, with the advancement in technology, lenders can now use valuation tools to figure out an estimated value of your property.

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Customers can also use these tools to get a better idea of their property. Further, loan application processes are steadily moving online and it is an easier process as well. On top of all this, if you apply for a home loan online, chances are you will get better interest rates and offers. Plus, it’s convenient because you can apply for the loan from any location. Lastly, electronic signatures are helping both the lenders and the borrowers to send electronically signed documents to each other. It saves time as well as money since there is no postage nor traveling involved. Hence, this means that applying for a home loan has become extremely easy with the advent of online technology. Approval takes a really short time so it gives you more time to assess your options.

These Factors affect your home loan EMI

Taking a home loan is one of the biggest financial commitments that you make, due to the high amount involved. Hence, this decision should be made after careful evaluation of all factors. The most important factor that you should take into consideration before applying for a home loan is your EMIs.

Image result for Factors that can affect your home loan EMIWhen you are calculating your home loan EMI, ensure your financial life is not adversely impacted due to the home loan. Take into account all the factors that can have a direct influence on your home loan EMI. The first thing that you should keep in your mind is interest rates. If you have taken a home loan at floating interest rate, there would be a change in the EMIs depending on the prevalence rates in the market.

Whenever there is a dip in the bank rates, your EMIs will reduce significantly. Also, they do not involve prepayment penalties. Next is your loan tenure. A change in your loan tenure can have a great impact on your monthly installments. The longer the tenure, the lower will be your EMI and vice versa. Further, it is highly advisable to check the pre-payment clauses with your lender before you sign the loan agreement.

Lastly, home loan borrowers can shift their home loan to a different lender to avail a lower interest rate benefit through a home loan balance transfer. Hence, there can be several factors which may impact your EMI during the tenure of your home loan. Carefully compare all the home loan offers available to you before making your final choice.

ALSO READ: – Factors that can affect your home loan EMI

How to Repay your home loan faster

Buying a home is a dream for many of us, but due to the high prices, only a few can afford to pay such a whopping amount. In such situations, buyers turn to banks for home loans. However, opting for a house loan is not that easy as the EMIs last for at least a decade and add to the burden for a majority.  But, don’t worry, we have listed a few tips that can help you to repay your home loan faster. You can opt for a higher EMI. It will help to reduce the loan tenure which means that the total interest that you’re supposed to pay to the lender also goes down. Further, home loan buyers also have the option to prepay the entire or part of the outstanding loan amount. Windfalls like bonus or maturity proceeds from insurance policies should be used to prepay a part of the home loan from time to time.

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Next option is that you can opt for a balance transfer. Under this option, you can transfer the entire outstanding loan amount to another lender at a lower rate of interest and other better terms and conditions. Lastly, you also have the option to maximize the down payment. Making a higher down payment when obtaining a home loan can reduce the principal amount. A lower principal amount means lower interest and EMI payments. So, in case you are struggling with debt-burden, take into account the above-mentioned steps to reduce your home loan interest rate burden. Also, don’t miss your EMI payments as it can severely affect your credit score.

 

How to take a home loan from HDFC

HDFC is the largest housing finance company in the country offering home loans at all customer segments across income, geography and property type. It offers loans to borrowers to buy, construct or renovate a house at attractive interest rates. You can easily apply for the home loan by visiting the bank’s branch or through various online aggregators. The steps involved in both processes are almost the same. But, in the case of online aggregators, you can compare various loan products and offers, and choose the one meeting all your requirements. The loan representative will guide you through the entire loan process. To apply for a home loan, visit the bank’s branch or online loans marketplace.

Fill in the application form containing your personal and employment details. Submit the documents. Post this, the HDFC’s representative will call you for the verification of documents. Then you will receive a sanction letter from HDFC mentioning the details of the loan. The sanctioned amount will be credited to your bank account. Once done, you need to hand over the original property documents to the bank. In the case of the offline process, you need to visit the nearest bank’s branch. The HDFC’s representative will help you out to fill the home loan application and you will be required to submit important documents to complete the loan process.

Hence, availing a housing loan from HDFC has become easy due to online processes. You can sit back at home and apply for the loan without any hassle.

How Housing Loan EMI Calculator is Helpful for Borrowers?

Home loan is availed for a longer period of up to 30 years and is a big liability, so, it is very important that the loan is affordable. If the loan repayments are unaffordable, then the borrower might end up in a debt trap. In order to assess the affordability of the home loan, you can use the Housing loan EMI calculator available online free of cost. EMI calculator requires three inputs:

Loan amount, the rate of interest applicable and tenure to calculate EMI schedule. There are many benefits of using an EMI calculator: With the help of an EMI calculator, you can estimate your monthly repayments instantly and can assess your affordability.

If you find that EMIs are not affordable, you can reduce the loan amount or increase the tenure to make them pocket-friendly. EMI calculator provides you a complete EMI schedule. You can also see the statement of the outstanding balance of your home loan after each EMI payment.

EMI calculator is very easy to use and you can also compare EMI of different lenders. So, before you apply for a home loan you should use the EMI calculator available online free of cost, to calculate your home loan EMIs and to ensure that they are affordable.

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