A home loan, as the name suggests, is a financing solution that allows you to borrow funds to purchase a property at a predetermined rate of interest and repayment tenor.
Types of Home Loan
- Home Loan for Resident Indian
- Home Loan for Non Resident Indian
- Home Improvement Loans
- Top Up Loan
- Save Income tax
- Home Loan shift from higher interest rate to lower interest rate
Benefits of Home Loan
To encourage more and more people buy their own house, government of India provides tax deduction on the principal as well as interest paid on home loan. An individual is eligible to claim a deduction of up to Rs 1.5 lakh under Section 80C of Income Tax of India 1971 Act in a financial year. While a deduction of up to Rs 2 lakh is allowed on the interest portion under Section 24B of Income Tax of India Act. The deductions under income tax are only available after the construction of the house is complete. You can’t claim the income tax deductions while the property is under construction.
Advantages of taking a Home loan
- Sense of accomplishment
- Capital Appreciation
- Low interest rate
- Tax Benefit: Interest paid
- Tax Benefit: Principal Repayment
- Home Loan shift from higher interest rate to lower interest rate