Key Features & Benefits of Home Loan
posted on 2019-08-01 11:59:05 by Admin
A home loan or housing loan is the money that an individual borrows from any financial institution to purchase or construct a house. The repayment of the borrowed money is given back to the bank in the form of EMIs at a certain rate of interest. It can consist of fixed interest rates or payment terms.
An individual can apply for home loan for multiple purposes like:
- Buying a house/flat/apartment.
- Buying a plot to make house.
- Renovation of house.
- Construction of new house.
- Extension of the current house.
- Repair work in the current house.
In home or house loan, the property of the borrower is mortgaged to the bank or non-banking financial company NBFCs as security until the borrower re-paid his loan completely. Before the fully re-payment payment of the lender’s money, the bank holds the title or deed of the property.
Currently, there are seven types of home loans in India that is:
- Home Loan.
- Land or Plot Loan.
- Home Construction loan.
- Home Extension Loan.
- Composite Loan.
- Home Improvement Loan.
- Home loan balance transfer.
Features and Benefits of Home Loan
There are so many features and benefits of getting home loan as it not only helps an individual in getting his dream home but give some relief in Tax too. However, feature provided in a particular home loan could be varies from bank to bank or lender. Below are some common benefits you will in most of the home or house loans.
- You can use your home loan amount for purchasing a new house, for its construction, expansion of a current home & improvement of the current home.
- From 2 lakh to 200 lakh, an individual can apply for loan as per his/her need but it is totally depended on his/her financial capacity, eligibility, repayment capacity, income & mortgage.
- Home loan gives benefits in Income tax. In India, one can claim maximum deduction of Rs. 2 lakh.
- Home loan gives a long period of re-payment to borrower which is up-to 20 years in India.
- Home loan is a kind of secured loan wherein collateral are required.