5 Big Benefits of Home Loan: Know why rich people prefer taking a home loan in India?

The thought of a home loan brings to mind the burden of monthly EMIs. Many people think that if they have the money, it's better to buy a house straight away. Why bother with a loan? However, even big businessmen and wealthy individuals, who are always short on cash, prefer home loans. The reason is clear: a home loan isn't just a means to buy a home, but also a smart financial planning tool. Let's explore five key benefits that make taking out a home loan a wise decision.

First Benefit - Income Tax Savings

The first major benefit of a home loan is tax savings. Section 24(b) provides a deduction of up to ₹2 lakh per year on interest, and Section 80C provides a deduction of up to ₹1.5 lakh on principal. If it's a joint loan, both applicants can save up to ₹7 lakh in tax.

Second Benefit - Property Title Assurance
Before approving a home loan, banks check the property's title and records to ensure there are no disputes. Legal verification verifies all necessary documents, ensuring that the property is not under any other occupation. This significantly benefits homebuyers, providing them with the assurance that the property they are purchasing is not disputed.

Third Benefit - Benefits of Having a Female Co-Applicant
If the co-applicant for a home loan is a woman, you may receive a slightly cheaper loan. Many banks offer a 0.05% lower interest rate for a female co-applicant.

Fourth Benefit - Customer-Friendly Loan
Home loans are much more customer-friendly than other loans. Their interest rates are significantly lower than personal or gold loans. Additionally, repayment terms are easier. Customers can prepay or foreclose if they wish. This is why taking a home loan is more beneficial than exhausting savings.

Fifth Benefit - Top-Up Loan
You can avail of a top-up loan on your home loan. A top-up home loan is a type of personal loan that offers lower interest rates. Top-up home loans offer ample time to repay, as their tenure depends on the tenure of your home loan. Furthermore, there are no hidden charges. If you have purchased a semi-furnished or old apartment, you can easily avail a top-up loan for interior renovation.

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