A number of Sections under the Income Tax Act, 1991 falls under the category where one can claim deductions. For instance, the deduction claimed under the heads of investments or expenses that are incurred during that particular financial year.
These home loan tax deductions help in decreasing the tax liability of an individual and by reducing their taxable income. But you must pay attention to the lock-in periods to such deductions. Otherwise, the amount of deduction claimed can further be revoked.
Let’s take a look at what are the home loan tax deductions? What are the heads under which one can claim such deductions? What are the lock-in periods?
Read- When Does Your Home Loan Tax Deduction Get Revoked
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.
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.
You have found your dream house and in an ideal location. You decide to apply for a home loan with a bank or NBFC that offers a good rate of interest on the loan. And then, your loan application is rejected. The reason? You are a pregnant woman. While gender and maternity aren’t part of the home loan eligibility criteria, there are a few banks that might reject your loan application due to these factors. Even if a woman is on paid leaves and fully intends to return back after delivery, many banks do not consider her an earning member until she actually returns to work.
Banks don’t even consider a letter from woman employees and their employers, specifying the exact date of return to work. They assume that she will give up her job after giving birth to her child. However, such type of mortgage discrimination is illegal. Not only married women but even single women have also been denied home loans due to their relationship status. In most cases, banks have asked women to bring in a co-applicant before they process the loan. Hence, when you apply for a home loan with any bank or NBFC, make sure that your lender does not discriminate—based on your gender, your marital status, or your pregnancy when processing the application. This can save you a lot of time and wasted effort.
Additional Reading:- Could bank deny your home loan because of pregnancy?
If you are planning to buy a house then the festive season is the right time to loosen your purse strings. Diwali is considered an auspicious time to buy a new thing like a new house. Buying a home is not an easy time task because it requires a huge investment. Diwali is the best time to buy a new home because most of the banks and NBFCs offers Home Loan on various attractive offers like a lower rate of interest, waive off processing fees, longer tenure and number of EMI options and so on.
On the occasion of Diwali, salaried people got bonuses, incentives etc and most of the people save in the preceding months in order to be splurge during festivals. People believe the Diwali deemed auspicious for buying a property. It is not enough to know the best time to buy a home and take the plunge with a herd. The more important thing is to know how to clinch the best deal at the most opportune time and it will be suggestable to apply for a home loan online as it will save your precious time.
Builders also offer attractive offer during Diwali because many new projects are launched during Diwali with a number of attractive offers. So, these are the reasons which suggest that the Diwali is the best time to a new home by taking a home loan.
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.
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.
With the increase in the price of the property, it has become almost impossible to buy a home entirely on your savings. And, this is where home loans come to your help. Getting a home loan is the best way to fulfil your dream of owning a house. And the best time of the year to apply for a home loan is during the festive season. We have listed a few reasons suggesting why you should take a home loan during this festive season.
Due to various customs and beliefs, people prefer to make huge investments during Diwali. Therefore, banks offer a range of deals and offer to make home loans look attractive. Not only banks but builders also come up with incredible offers to attract customers. During Diwali, getting as huge as a ten percent discount from the builders is quite common. If the festive season ends, there are chances that the banks will do away with festive offers and increase the home loan interest rates. So, it’s better to apply during the festive season.
Lastly, don’t get sidetracked with attractive offers. When searching for a home loan, it is important to pay attention to three attributes, interest rates, tenure, and fees. These factors will decide how much you will have to pay every month once the festive season ends. Therefore, instead of getting distracted by the seemingly attractive offers, evaluate your options carefully to make a well-informed decision. So, hurry up and grab the deal.
Additional Reading:-Why taking a home loan on this festival season is a good idea?
A common dilemma faced by potential borrowers is where to apply for a home loan. Should they go to a bank, or approach a non-banking financial company? Both are financial entities that offer lucrative deals to customers with all kinds of borrowing needs. However, it is important that you should first clearly understand the differences between the two.
One of the major difference is that these two institutions are managed by separate government agencies. While the RBI keeps a check on the banks, the Companies Act regulates NBFCs. No NBFCs offer overdraft facilities. As far as banks are concerned, only a handful few offer overdraft facilities. While choosing between a bank and an NBFC, you should first compare interest rates. Choose the one offering the lowest interest rates with better offers and terms & conditions. Further, a credit score of 650 and above is considered suitable to obtain loans at better interest rates.
However, customers with a lower score may find loans from NBFCs to be less stringent in terms of eligibility requirements. Plus, documents required for home loans are minimum when it comes to NBFCs. The procedure in the case of banks is more cumbersome. State Bank of India (SBI) offers home loan at the lowest interest rate of 8.65% onwards, with special discounted rates for women borrowers. Other banks such as Axis Bank and Citibank also offer home loans at affordable interest rates. Hence, both banks and NBFCs have their advantages and a final decision must be made keeping in mind the interest rates, charges, credit score, and the loan disbursal timelines.
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