Here is why Taking Home Loan can be Beneficial
Jun 12, 2018 Home Loan
People often avoid taking the home loan, thinking about the interest to be paid. But experts have something different to say. They suggest that one should take the home loan even if you don’t require it due to its various advantages that many people might not know about.
Avail of taxation benefits
Home loan offer several tax benefits such as in case of self occupied property the borrowers can claim a deduction of Rs 2 lakh on the interest rate under Section 24 of the Income Tax (I-T) Act. The income tax deductions consist of municipal taxes paid, 30 percent of the rental income and the interest paid on the home loan in case of a rented property. A deduction of Rs 1.5 lakh can be claimed on the principal repayment under Section 80C of the I-T Act.
Don’t lock your funds
Real estate requires a huge amount of investment which means the investor or the buyer might have to lock-in huge funds. Experts suggest that the buyers should not put all their money in one go, rather they should make judicious plans to use the funds. However real estate is indeed a good investment option but it won’t give results like mutual funds, stocks, bonds etc. So experts’ advice that one should not lock-in their entire funds in real estate only, they should diversify their investment portfolio and aim for better results.
Improve credit score
Timely payment of EMIs as well as repayment of principal amount impact one’s credit score. If the credit score remains healthy and time to time it gets healthy then one has a better chance to get credit cards and loans in future.
Be prepared for emergencies
One should always keep enough money for uncertain emergencies. As mentioned above experts advised not to put entire money in real estate or make any other investments at one go.
Better deal: if an individual is paying the money upfront then he or she should go for a better deal as making the entire payment give the buyer a better chance to consider better options for properties. And choosing a home loan provides more financial freedom while increasing the chance of choosing a better house in a good location.
It should be also remembered that home loan is the cheapest form of debt being offered by banks and financial institutions at lucrative rates. But one should always research and analyse to make an informed decision while opting for a home loan.
Better deal: if an individual is paying the money upfront then he or she should go for a better deal as making the entire payment give the buyer a better chance to consider better options for properties. And choosing a home loan provides more financial freedom while increasing the chance of choosing a better house in a good location.
It should be also remembered that home loan is the cheapest form of debt being offered by banks and financial institutions at lucrative rates. But one should always research and analyse to make an informed decision while opting for a home loan.
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