Purchasing one’s dream house is one of life’s most significant financial decisions. Moreover, taking a Home Loan to buy it is an even bigger commitment. An average Indian views a Home Loan as a huge liability that keeps them indebted for several years. Therefore, one must know how a Home Loan helps before making the final decision. Read on to know more about a Home Loan of ₹ 25 Lakh and the help it lends to the borrower.
Makes the Dream House Accessible
For salaried employees and self-employed professionals, getting a Home Loan to buy a property is the most accessible financing method. With sufficient funding from an NBFC, borrowers can search for a bigger home, a better location, and better facilities.
Getting a loan becomes easier for an aspiring borrower with a credit rating of 700 or above and a positive credit history. That happens because the loan company feels confident in the borrower’s sense of credit responsibility and repayment habits. Moreover, the extended repayment tenures of up to 30 years keep monthly instalments manageable without burning a hole in the borrower’s pocket.
A Home Loan EMI calculator helps calculate the EMI for Home Loan of 25 lakhs and select a suitable tenure. The borrower can divert surplus funds toward their retirement planning or other luxury purchases.
Cost-Effective Access to Credit
Non-banking financial institutions (NBFCs) offer Home Loans at attractive interest rates compared to other loan types like gold loans and Personal Loans. Generally, the interest rate depends on the lender’s policy and the borrower’s profile. Those with an existing relationship with the NBFC can negotiate better interest rates based on their repayment history and credit rating. Since it is a secured loan, the property papers are mortgaged with the NBFC until complete repayment of the loan, the interest rates are highly competitive.
Use an EMI calculator for Home Loan India and select a repayment plan for easy EMI management. Paying off the loan EMIs on time highlights the borrower’s status as financially responsible, improving an individual’s credibility for future loans. Once they repay the existing loan, they can avail of more loans in the future at competitive interest rates.
Availing of a Home Loan and repaying it in EMIs ensures that the property purchase does not become a burden on the buyer’s pocket. Opting for a longer repayment term makes repaying the home loan easy for some borrowers, giving them the space they need to invest surplus income in other investment avenues for higher returns. Over time, it helps compound the savings, assisting an individual in creating and accumulating wealth.
Enhanced Net Worth
The Indian real estate market has shown a consistent growth rate in recent years. With assured appreciation in property prices, purchasing property with a loan will surely add to the borrower’s net worth. Therefore, taking a Home Loan is the most logical way of financing a property, whether the buyer wants to acquire it for residential or investment purposes. Even after paying every EMI for a Home Loan of 25 lakhs with full interest, the capital appreciation will be higher and give good returns when selling the property.
Guaranteed Property Safety
Every individual wants to buy a property free from legal disputes. When they apply for a Home Loan, the loan company checks the builder’s background and credibility. They approve a loan only after checking all the certificates and documents from relevant authorities. Therefore, a positive evaluation report ensures property safety and avoids legal disputes.
Another significant advantage of a Home Loan is its tax benefits. Self-employed professionals and salaried employees can claim tax exemptions on the principal and interest component of their home loan repayment. Section 80C gives a tax benefit of up to ₹ 1.5 Lakh on principal, and Section 24B provides a deduction of up to ₹ 2 Lakh on the interest.
Taking a Home Loan of ₹ 25 Lakh helps a borrower in many ways. However, it is still a massive commitment, and the borrower must have a robust plan to pay each EMI for a Home Loan of 25 lakhs on time. Select the loan company offering the best interest rate and use an EMI calculator for Home Loan India to handle the credit responsibly.