5 benefits of taking a home loan

Purchasing a home is a major financial decision after sieving through a wide range of finance options. Consequently, home buyers are opting for home finance from banks and financial institutions that not only help them with the best finance options based on their specifications and requirements but also help them in the entire process of owning a home.

Jairam Sridharan, MD, Piramal Capital and Housing Finance, says, “With the expanding housing industry landscape and increasing focus on providing the best solutions and services to the customer, availing housing finance has now become a hassle-free process.” 

He further adds, “With the advancement in technology, customers have a plethora of digital lending platforms to avail a suitable home loan deal that is best suited for an individual.” 

Further, housing finance companies and financial institutions are also leveraging data-driven Artificial Intelligence (AI) and Machine Learning (ML) tools to improve customer experience and enhance the lending process.

Here are some of the benefits first-timers can avail while applying for a home loan;

• Tax Exemption: The current applicable exemption under section 24(b) is Rs 2,00,000 for the interest amount paid in the financial year and up to Rs 1,50,000 (under section 80 C) for the principal amount repaid in the same year. 
• Co-applicant: There are several advantages of opting for an earning co-applicant such as enhanced home loan eligibility, equal liability for loan repayments, segregation of EMIs, income tax exemption, etc. Sridharan explains, “Co-borrower’s involvement is a blessing for the loan applicant and the lender is assured of timely repayments. The responsibility of monthly EMIs is shared by the applicant and co-applicants thus easing the repayment process.” Note that, both the applicant and co-applicants are eligible for income tax exemption at the end of the fiscal.  
• Women as a co-applicant: Women borrower or co-borrower helps to improve the chances of getting the loan. “For first home buyers, having women as a co-applicant could also fetch one concessional interest rate at several financial institutions,” points out Sridharan. A woman co-applicant co-owning the self-occupied house is eligible for extra interest deduction of interest of upto Rs 1.5 lakh each financial year. 
• Overdraft facility: Individuals looking for frequent liquidity, Sridharan says can also opt for a top-up home loan with an overdraft (OD) facility. “Some financial institutions provide an OD facility in a home loan top-up. Borrowers who want to pay off their Housing Loans faster and save money on interest can use an Overdraft Facility,” he adds.
• Top up benefit: As a borrower, once you start the journey, you can also utilize the benefits of a top-up on a home loan to satisfy a variety of needs, including unexpected financial needs, medical expenditures, and supporting your child’s education.