The introduction of The Real Estate (Regulation and Development) Act, 2016, and the establishment of the Real Estate Regulatory Authority (RERA) has significantly affected the real estate sector in India. It has brought much-needed transparency in this sector. As a result, real estate sales have also boosted.
Therefore, if you are planning to invest in real estate, then it is ideal to avail of a home loan from any housing finance company. There are other credit options as well, but they will not offer you the following benefits.
Reasons to Opt for a Home Loan
a). Competitive interest rate
Compared to other sources of credit, housing loans offer a more competitive rate of interest. Moreover, the recent revision of the repo rate by the Reserve Bank of India has made borrowing easy for customers. Thus, instead of using your savings, avail home loan to purchase a house.
b). Longer tenor
Home loans typically offer a repayment tenor of up to 20 years or more, depending on the lender. Therefore, you have a long time to repay your debt.
c). Easy EMIs
Due to significant tenor, home loans attract more affordable EMIs compared to other modes of credit. The entire debt here is divided into a longer period, and thus, the EMIs become easier to bear.
d). An assurance on the property
Before approving a home loan application, the lender will thoroughly check the property papers to check if there is any dispute with it or not. Therefore, you can get the much-needed assurance on the credibility and legality of the property. Whereas with other modes of credit, you do not have this facility.
e). Tax benefits
One of the primary reasons to opt for a home loan is to avail of tax benefits associated with it. According to the Income Tax Act of 1961, if you have purchased a property and are paying regular EMIs for a housing loan, you are entitled to certain benefits. You can avail the following income tax benefits on your home loan –
- As per Section 80C of the IT Act, you are eligible for tax deductions of up to Rs.1.5 lakh available on repayment of the principal amount of home loan.
- According to Section 24, you can avail income tax deductions of up to Rs.2 lakh on the interest repayment of your credit.
- Section 80EEA states that every first-time homebuyer can avail of an additional deduction of Rs.1.5 lakh.
f). Top-up loans
As the name suggests, these loans are an additional fund offered by lenders on home loans. A significant advantage of such loans is that they have no end-use restrictions. Moreover, the terms and interest rates of top-up loans are also affordable.
Every major HFC is the country offer top-up loans on home loans. These loans are easy to avail and need no additional documentation.
Apart from this, prominent HFCs also provide pre-approved offers on their home loans along with other financial products like loans against property and more. These pre-approved offers make the loan application process easy and time-saving. You can check your pre-approved offers by submitting your essential contact details.
Nonetheless, before you go ahead and apply for a home loan to avail of these benefits, you should know about the home loan eligibility criteria that you have to fulfill for it.
Home Eligibility Criteria
- You must be a resident of India
- Your age must be in the range of 23-62 years for salaried individuals and for self-employed it is 25-70 years.
- Salaried individuals should have work experience of 3 years or more. Self-employed applicants, on the other hand, must have an established business, aged five years or more.
Once you fulfill these criteria, you have to submit the following documents required for a home loan.
Required Documents of Housing Loan
- KYC documents
- Address proof
- Form 16 or latest salary slip for salaried individuals
- IT returns and balance sheet of the business for self-employed individuals
- Bank account details of the last six month
Home loans offer a wide range of benefits to every aspiring homeowner. If you still have any doubts, you can get all your home loan queries answered by talking to the representative of the lender.