5 Advantages Of Opting For A Home Loan

Screenshot_9

The rising prices of a real estate has made the process of purchasing a home difficult for individuals who wish to buy one. The purchase of a home involves a lot of finances and sometimes they may not have the sufficient finances for handling the purchase of a home. A home loan is a loan product that is provided by financial institutions. An individual can simply go for a home loan when they wish to buy a home, but do not have the sufficient finances for the purchase of a home.

A home loan is a loan product, provided by the financial institutions where they will provide the customers with the loan amount for the purchase of a home. Home loans are secured loans, that means the customer will have to provide an asset as collateral to the financial institution. This collateral is provided as security to the bank. If the customer fails to make any of the repayments on time, the financial institution has the right to seize the collateral provided by the customer.

The financial institution will use the customers asset as collateral in order to secure the loan amount that has been provided by the financial institution. Since a home loan is a secured loan, the interest rates offered on them are comparatively low. The amount of loan that an individual can get from a financial institution will depend on the income and the credit history of the customer. Customers can apply for a home loan with their spouse or other family members as co-applicants.

5 advantages of opting for a home loan are:

  1. Freedom from the burden of rent: Since the price of real estate has gone up, the rent that is offered to the customers will also go up which is not a viable option as it will start affecting a customer’s monthly budget, as it is always better to make payments through EMIs.
  1. No prepayment charges:  When a customer wishes to make payment on the loan before a given date, mostly on different loans a prepayment charge is applied. But in the case of a home loan, there are no prepayment charges applied.
  1. Tax benefits:  To boost the motivation for an individual to buy, the Government of India has provided the option for tax deduction son principal as well as the interest paid on a housing loan. These deductions also come under income tax, only after a house has been completely constructed. Customers can’t claim tax deductions while their property is under construction.
  1. Easy to buy dream home:  For a lot of citizens, buying a home through their own finances is difficult. Housing loans help a customer with the finances.
  1. Long repayment tenure:   The repayment tenure of a housing loan can go up to 30 years, so they will not be a burden on the customer.

Comments are closed