Top-7 Reasons Why Home Loan is the Best Loan if You are Planning to Purchase a House

Introduction

Loans come in all shapes and sizes. Whatever your aspiration is, there is a loan that will sponsor your dream.

This article gives you the top-7 reasons why a home loan can best fulfil your dream of owning a house.

1. Low Rates of Interest

Time has never been as ripe for a home loan borrower as it is now. As part of the government’s intention to make housing affordable for all, home loan interest rates are at their multi-year lows. For instance, PNBHFL’s home loans start at 8.95% for salaried and self-employed professionals.

2. Benefits of Tax Deduction

Many borrowers apply for home loans even when they can afford to construct the house without it. It is because of the excellent tax benefits that come with a home loan.

With home loans, it is possible to claim deductions of up to Rs. 5 lakh. Under Section 80C, you may claim deductions of up to Rs. 1.5. lakh on principal; under Section 24B, you may claim deductions of up to Rs. 2 lakh on interest; and up to Rs. 1.5 lakh under Section 80EEA, if you are eligible.

3. Minimal Documentation

A few documents are all you need to get your home loan approved. It includes your photograph, age, identity, and address proof, salary slips, income statement, bank statement, Form 16, IT Returns, approved plan of the property, property documents, and processing fee cheque.

There are very few loans that sanction the loan amount without requiring too many documents. A home loan is one such loan.

4. High Loan Amount

A home loan is the best medium to get as much money as you need, depending on your income profile, though. If you meet all the criteria as required by the lender, then you may get a loan amount as high as up to 90% of the property’s value.

5. The Facility to Transfer Balance

The way you can change your phone number to get more features, in the same way, it is easy to switch your lender if you are not satisfied with the existing one. The facility to transfer your balance to a lender who offers better interest rates on friendly terms is what makes a home loan more attractive.

6. Long Repayment Tenure

Unlike many other loans, a home loan provides you with the benefit of longer repayment tenure. Some top-class lenders allow you to choose up to a 30-years repayment window. However, as an informed borrower, you must consider your repayment capacity and choose a tenure that suits you the best. Although a long repayment tenure reduces your monthly outflow, the extended duration effectively increases your interest rate and offsets the notional gain.

7. Simple Eligibility Criteria

Many borrowers think that, to avail of a home loan at an attractive interest rate, they need to meet complex eligibility requirements. However, this is not the case. The eligibility criteria make it extremely easy for anyone to become a borrower and construct or purchase their dream home.

To apply for a home loan, you have to meet the following criteria:

1. Age limit – 70, at the time of loan maturity
2. CIBIL Score – a minimum of 700
3. Nationality – Indian
4. Income Threshold – lender specific

Conclusion

A home loan can fulfil the ultimate dream of any human being – to have a shelter of his/her own.