How Is A Home Loan Beneficial?

A home is where you can relax and reside safely after a hectic day at work. It gives you peace of mind and ensures you get the freedom to perform your chores without any interruption. You aim to lead a secure and peaceful life with your family without worrying about insecurities and giving them utmost attention.

Banks and financial institutions are offering a home loan to every citizen of the country to fund the cost of the property. You can borrow a loan amount according to your affordability and repayment capacity and repay it with interest in equated monthly instalments. You can apply for a loan for constructing and renovating the house as well.

Tax benefits

To encourage more people to buy a house, the Indian Government provides a tax deduction on the principal and the interest payable on the housing loan. You are eligible to claim a tax deduction of up to Rs. 1.5 lakh on the loan amount and Rs. 2 lakh on the interest in a financial year under Section 80 C and Section 24 B of the Income Tax Act, 1961. The deductions are only available after the completion of construction.

Convenience

You can receive quick approval when you apply for home loan, even before selecting the property. It helps you arrange funds and pay the seller immediately without wasting time. You can also get attractive interest rates with affordable repayment options from the bank or lender.

EMI repayments

You can repay the loan from your bank account in affordable monthly instalments. Set the auto-debit feature by giving standing instructions to the bank and saving time. You can also avoid the hassle of signing and procuring cheques for the payment.

High repayment tenure

You get a high repayment tenure which can go up to 30 years even when you apply for home loan online. These days, you can visit the bank website or download the official banking app to access all their banking and finance products without seeing them personally. You can reduce the burden of instalments by extending the loan tenure.

Attractive interest rates

When you avail of a home loan in India, you get it at a low and attractive interest rate compared to other unsecured loans. Generally, the interest rate ranges between 7.35% to 8.50%, making it an affordable loan scheme.

Security

Buying a home is one of the biggest financial commitments. You need to pay the EMIs on time and ensure you have the repayment capacity to finance the loan. It gives you mental satisfaction and a sense of accomplishment. You can secure your future by applying for a home loan online and reducing the paperwork.

Tips For NRIs Interested In Buying A Home In India

Non-Resident Indians (NRIs) may use NRI home loans to finance their plans to buy a home in India. However, the mechanism should also ensure that the Foreign Exchange Management Act of 1999 (FEMA) and related RBI regulations get followed because of the cross-border remittance requirements. As a result, when applying for a home loan for NRI in India, NRIs must keep the following points in mind:

• Home loans are available for a wide range of residential properties, including new construction and ready-to-move properties. In addition, a home loan can get used to finance the purchase of a plot, building works, and maintenance and improvement costs. However, under current FEMA legislation, an NRI gets no permission to purchase agricultural land, plantations, or farmhouses, among other things.  

As a result, even if an NRI wants to be a co-borrower, no loan can be obtained for such a house. 

• According to RBI regulations, an NRI home loan can only get repaid with NRI accounts, like NRE and NRO accounts. Apart from debits from an NRI account, a foreign money transfer from abroad may get used to credit the Home Loan directly.
  
  
• An NRI should prepay their NRI home loans in the same way that residents can. However, credits into the home loan account must come from the borrower's NRI accounts or foreign remittances to meet the standard repayment conditions.
  
  
• Banks typically charge slightly higher credit spreads due to the higher risk perception of the person staying out of the region. As a result, the home loan interest rate for NRI is slightly higher than for locals. If an NRI returns to India with the aim of settling, the loan account must be converted to a residential home loan so that lower interest rates can get obtained.
  
  
• Compared to a standard home loan for Indian citizens, NRI home loans come with additional paperwork requirements. You will need to submit a copy of your passport and a valid visa along with the application form. A General Power of Attorney (GPA) will need in favour of a resident Indian with whom the bank can interact in India.
  
  
• Though NRIs may jointly purchase a property in the name of another NRI, this is not possible with a resident Indian or those who are not permitted to buy property in India.