A Home loan can be used to purchase a new home or apartment, a piece of land on which to build a home, or even for home remodeling, additions, and repairs.
A Home loan is an amount of money borrowed from a bank or other financial organisation for the purpose of purchasing a house or apartment. It includes payment conditions and a fixed or variable interest rate. a set interest rate that must be paid each month along with the EMI.
This is the most popular kind of home loan availed to buy a house. You can borrow money to buy the home of your choice and repay the loan in monthly instalments through one of the many housing financing businesses, public banks, or private banks that provide housing loans.
You can Avail up to 80%-90% of the house’s market price in the form of financing. The property will be kept by the lender until the loan is fully repaid.
If you already own a piece of land and need money to build a house on it, you need financing to construct a house in that land.
Let’s say you already own a home and would like to add a room or a floor to it to accommodate your expanding family. Loans for home extensions might be used to finance this.
A home repair loan offers funding for home renovations or repairs, such as painting the inside or outside of the house, upgrading the electrical system, waterproofing the ceiling, and more, if there is any problem with the current system.
You can transfer the remaining balance of the house loan to a new lender who offers a lower interest rate and better service if the present interest rate on the loan is too high for you or you are dissatisfied with the service provided by your current lender. You can even investigate the potential for a top-up loan on your current one after the transfer.
The biggest advantage of a loan is the income tax deduction you can take for paying back the principle and interest. You may deduct up to Rs. 1.5 lakh for principal repayments made under Section 80C, up to Rs. 2 lakh for interest repayments made under Section 24B, up to Rs. 2 lakh for interest repayments made under Sections 80EE and 80EEA, and up to Rs. 1.5 lakh for stamp duty expenses made under Section 80C.
In comparison to other types of loans, the interest rate on a home loan is significantly cheaper. If you run into financial trouble, you might be able to extend your current house loan at a cheaper interest rate than a personal loan.
Home loans have a longer repayment period than any other type of loan, up to 25 to 30 years. This is because borrowing a large loan amount is required to buy a house. The monthly EMIs will be lower if the loan amount and related interest are spread over a longer term, easing the load on the borrower
You have the option of changing lenders for your bank loan for a number of factors, including interest rates, fees, and customer service.