Many people think home loans are a burden because they take years to repay. But did you know home loans come with amazing benefits? Even rich people take home loans instead of paying full cash for a house. Let’s see why!
Big Tax Benefits
When you take a home loan, you can save a lot of money on income tax. Under Section 24(b), you can get a tax deduction of up to Rs 2 lakh on the interest you pay yearly. Under Section 80C, you can save Rs 1.5 lakh on the principal repayment. If the home loan has two applicants (co-applicants), both can claim tax benefits separately. Together, you can save up to Rs 7 lakh in taxes per year.
Assures Property is Not Disputed
Banks do a complete legal check of the property before giving the loan. They verify the title and all legal documents to ensure the property is not under any dispute. So, when the bank approves your home loan, it means the property is safe and clean to buy.
Saves Your Savings
Home loans have low interest rates, especially compared to personal loans. So, instead of using all your savings to buy a house, you can take a loan and pay slowly. You can use your savings for future needs or invest somewhere for better returns.
Top-Up Loan Option Available
You can take an extra loan (top-up loan) on your home loan at a low interest rate. This is helpful for renovation, interiors, or other needs. You can repay it over the same period as your home loan — 10, 15, or 20 years.
Improves Credit Score
If your credit score is low, repaying a home loan on time helps improve it. Also, if you add a female co-applicant, many banks offer a lower interest rate (0.05% less). Home loans are flexible — you can prepay or close them early without big charges.
