Advantages and Benefits of Availing Home Loans
The escalating property rates make it impossible for some to fulfil their dreams of buying their own house. It has become essential to avail a home loan because sometimes one’s savings are not enough. Buying or constructing your own home is one of the biggest accomplishments one can ever achieve, but you can also consider it one of the biggest liabilities. It involves a large amount along with a longer tenure but apart from that it is quite advantageous for one to avail the loan for the following benefits.
Investing in a house is dream fulfilment for many since it is one of the largest investments of one’s life. Also, if you compare statistics, the past couple of years have been a joyride for property holders since the prices have been escalating at great speed. With the boom in the property industry, the prospect for people to buy properties has increased. The percentage increase in construction costs itself has been of about 15 percent. The ongoing inflation has negatively affected rents/rented apartments; therefore, investing in a house is one of the ways you can shield yourself from inflation.
The fluctuating interest rates
Home loans are availed for a longer tenure; therefore, you should know that the interest rates will not remain the same. There will be constant shift in the interest rates which may go through a cycle of several ups and downs. When the interest rates are low, you will be able to benefit from the situation.
Also, if you have applied for a home loan recently, then you will be able to avail better rates than other existing borrowers.
Benefits in terms of the tax
- Interest paid: According to section 24(b), Income Tax Act (1961), you can receive some income benefits if the deductions are up to Rupees 1.5 Lakh towards the total interest paid on the availed loan.
- Principal repayment: According to section 80CCE of the Income Tax Act (1961), you can avail tax benefits towards principal repayment of up to Rupees 1 Lakh of the home loan.