What are the Benefits Of Housing Loans In India?
A Housing loan has always been the most practical approach for the Indian middle class households in order to secure their dream home. Yet, it cannot be taken lightly as it is a long financial commitment and the amount of investment required is sizable too. Hence, you must choose to customize your housing loan in a way such that it allows you to enjoy all the related benefits.
Housing Loans in India have several advantages. As a borrower starts paying his EMIs, the principal amount and the interest on his home loan get deducted from his taxable income for that financial year. Thus, he would end up paying lesser income tax for that particular year. If you jointly apply for your housing finance along with your spouse, then both of you can save money; meaning that you would need to pay a much lesser amount of income tax individually, thus saving a considerable sum at your disposal.
The amount of the home loan EMI is unique for each individual. In most cases, it is almost similar to the rent that people pay to their landlord. In other words, you could own the house that you pay rent for if you can manage the down payment for it. So instead of paying rent to the landlord, you would rather pay the EMIs to your housing finance company. You could thus own a home and enjoy the capital appreciation over time if you manage the payments for the loan successfully.
For majority of the people, it is the same financial scenario whether they decide to pay their landlord or a housing finance company. The common challenge is managing the 15 to 20% of the total value of the house for the down payment, qualifying for the home loan eligibility criteria and producing the required documents for the housing loan .
Most people perceive their home loan as a liability. In many ways, it is. However, it is a rewarding asset building process as well. In simple words, you can enjoy much higher capital appreciation as compared to other major securities in India. Therefore, you would earn a much bigger capital gain than the principle amount and interest that you would pay as part of the loan. Hence, it is extremely necessary to understand all the aspects of the home loan in order to make financially sound decisions. Knowledge is power, use it well.
