No one can deny the fact that the dream of owning a home is universally cherished. Whether it’s the allure of building memories within its walls or the feeling of security it provides, the aspiration to buy a house runs deep. However, with real estate prices soaring, this dream can sometimes feel unattainable.
However, home loan is a fantastic solution that can make your dream a reality. This financing tool has made homeownership a reality for countless individuals. If you’re on the fence about applying for a home loan, read on to discover some of it’s incredible benefits that you might be missing out on.
Top 10 Benefits of Obtaining a Home Loan
Owning a home is a common aspiration, and despite its substantial financial implications, it offers numerous benefits beyond simple ownership. A prevalent method of financing this dream is through a home loan, which comes with a range of advantages.
Here, we will detail the top 10 benefits of home loans, highlighting how they can facilitate homeownership and offer extended financial benefits and its potential long-term value.
1. Financial Leverage and Affordability
Real estate prices can be hefty. Very few individuals have the financial capacity to make an outright purchase. Home loans act as a bridge, making high-ticket purchases possible. With a small down payment, you can own a home and repay the amount in convenient monthly instalments. It’s essentially leveraging the bank’s money to realise your dream sooner rather than later.
2. Asset Appreciation
Real estate is often seen as an appreciating asset. While there are market fluctuations, over the long term, property values generally rise. By securing a home loan, you’re not just buying a place to live, you’re also investing in an asset that may appreciate over time, potentially offering lucrative high returns.
3. Tax Benefits
One of the lesser-known advantages of a home loan is the tax relief it brings. Taking out a home loan enables you to claim income tax deductions on both the interest and principal portions. Under the Income Tax Act, 1961, as per Section 80C, you can claim up to INR 1.5 lakh on principal repayments and up to INR 2 lakh on interest repayments under Section 24B. There are various other tax benefits of a home loan, which you can avail of.
4. Credit Score Enhancement
Regular and timely repayment of any loan can give your credit score a boost. A home loan is no exception. By maintaining a consistent repayment record, you can improve your creditworthiness, which can be advantageous when seeking other types of credit in the future.
5. Encourages Forced Savings
Paying monthly instalments towards your home loan is a form of building a habit of savings. By allocating a specific amount each month for your home, you cultivate a disciplined approach to finances. At the end of the loan term, not only do you own a house, but you also have a history of consistent savings, which can be beneficial in various ways.
6. Flexibility in Repayment
Many financial institutions and banks offer flexible repayment options. You can select from fixed or floating interest rates or opt for a longer or shorter loan tenure based on your income and comfort level. Some institutions even allow pre-payment or part-payment options, enabling you to reduce your liability whenever you have surplus funds.
7. Inflation-Adjusted Purchase
Consider this: If you plan to save up for ten years to purchase a home outright, the price of your chosen property might rise significantly during that period due to inflation. However, by using a home loan, you lock in the current price and pay it off in future rupees, effectively sidestepping some impacts of inflation.
8. Financial Stability and Security
Renting a house might seem convenient, but it’s not without its pitfalls. Rental costs can increase, or you might be asked to vacate on short notice. Owning a home brings stability, and while a home loan is a liability, it transforms into an asset once it’s paid off, providing long-term security for you and your family.
9. Competitive Interest Rates
With the growing competition among lenders, interest rates on home loans have become increasingly competitive. Many institutions also offer attractive schemes for women borrowers or first-time homeowners. It’s wise to look around and negotiate for the best deal.
10. Emotional Gratification
Last but certainly not least, the emotional satisfaction of owning a home is unparalleled. It provides a sense of accomplishment, security, and belongingness. Every instalment paid brings you one step closer to fully owning your abode – a feeling that’s truly priceless.
Choose a Reliable Lender to Obtain a Home Loan!
Applying for a home loan is not solely about borrowing funds; it’s a step towards realising your dreams, building an asset, and ensuring financial security. With a wide range of benefits, it’s no wonder that home loans have become the go-to solution for prospective homeowners.
If you’re considering home ownership, now might be the time to dive deep into the world of home loans and make your dream a reality. It is important to partner with a reputed lender, and Tata Capital is one of the top NBFCs that has established its name by building trust.
Partnering with a reputable leader in financial services can help you enjoy a seamless and reliable home loan experience. So, don’t forget to visit the Tata Capital website and secure your loan today!