Features and Benefits of Home Loans

Home loans are secured loans that can be availed from banks or any lending institutions at a certain rate of interest.

The benefits of the home loan vary across various lenders and loan schemes. Following are a few common home loan features and benefits: 

1. Low-Interest Rates: The banks and financial institutions provide attractive and reasonable interest rates that make these loans more affordable
2. Flexible Loan Tenure: Home loan repayment periods can extend to 30 years, giving the individual a benefit of lower EMIs and greater flexibility of repayments
3. Annual Tax Benefits: One can claim a total tax deduction of about Rs. 5 lakh on the principal and interest components of the housing loan (under Section 80C, 24b and 80EEA)
4. Interest Subsidy under PMAY: For the first-time homebuyers, they can save up to Rs. 2.67 lakh on interest through the Pradhan Mantri Awas Yojana (Urban) Credit Linked Subsidy Scheme
5. Home Balance Transfer Facility: In the home loan balance transfer, one can refinance its existing home loan to another lender offering lower interest rate or better loan terms
6. Top-up Loan Facility: In the top-up loan facility, the person can borrow an additional sum over and above its existing home loan and use it for any personal or business purposes
7. There are no prepayment charges: In contrast to other loans where lenders can charge prepayment penalties, on payment made towards the home loan, there will be no prepayment penalties on floating rate home loans. Thus, whenever there's a surplus of money, you can utilize it for making a part payment towards the home loan and lower the burden
8. It becomes easier to purchase dream home: Sometimes for some people, it becomes tough to purchase a house with their own money. Thus, home loan makes the process easier as they can be repaid in easy monthly instalments
9. Enjoy capital appreciation: One can benefit from the rise of property prices over time
10. Saves from paying high rents: Rents in metro cities can be very high, adding strains on your monthly budget. Thus, it'll be wiser to pay the EMIs and own a house

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