You all might have a dream to own a house. However, it is very costly to construct your ideal home from scratch. A home loan could be a great way to fund your purchase. Let us find out how.
What Is A Home Loan?
A home loan is borrowed from a financial institution to buy or build a house. Not everyone indeed has the cash to buy or construct a home at once, here is where banks and other lenders come to the rescue. They fill in the gap by funding in exchange for regular repayments, with interest.
The most common sort of home loan offered by financial institutions is used only for residential purposes (such as buying a house or apartment, constructing a dwelling, etc.). Additional benefits that are available with this loan include longer loan terms, more adaptable repayment schedules, tax rebates, and so on.
Advantages Of Obtaining A Home Loan
Here are some benefits of obtaining a home loan:
The ability to deduct interest and principal payments from your taxable income is the biggest perk of getting a house loan. Stamp duty payments up to Rs.1.5 lakh u/s 80C. Interest repayments up to Rs.2 lakh u/s 24B. Interest repayments up to Rs.2 lakh in specific situations u/s 80EE and 80EEA, and principal repayments up to Rs.1.5 lakh u/s 80C are all tax-deductible.
Lower rate of interest
The interest rate on a house loan is cheaper compared to other loan options. If you’re having trouble making ends meet, refinancing your house loan is a cheaper option than taking a personal loan.
Property research due diligence
In the case of a home purchase funded by a financial institution, the latter will perform extensive due diligence on the property from a legal point of view, including verifying the authenticity of any supporting papers.
The chances of getting scammed will be minimal in this case. Thanks to the bank’s attentiveness on the matter. Assuming the bank is satisfied with the property, you and your home, both are protected.
Long repayment tenure
Mortgage loan repayment periods are quite lengthy, generally lasting between 25 and 30 years. This is because taking out a mortgage requires a significant amount of debt.
Repaying the principal and interest over a longer period will lower the EMIs.
No penalty for advance payment.
With a floating rate of interest, you can make pre-payments anytime you have a large sum of money available, without incurring any penalties. This will allow you to pay off your house loan much before the end of the agreed-upon term.
Balance transfer facility
The home loan interest rate, fees, and satisfaction with customer service are just a few of the factors that might prompt a homeowner to switch mortgage lenders.
Home Loan Interest Rates
As of March 2021, the average interest rate on a house loan in India is 11%. Lender to lender, the repo rate set by the Reserve Bank of India (RBI), inflation, economic activity, and other variables also influence interest rates.
When we talk about house loans, certain banks provide discounts to women, bank employees, and senior citizens.
In addition, the home loan interest rate might be either fixed or variable.
An adjustable-rate mortgage’s interest rate remains constant irrespective of market swings, whereas a floating-rate mortgage’s rate might change often. The borrower may or may not reap any benefits from this.
Features Of Piramal Home Loan
The following are some of Piramal Home Loans’ features:
Low CIBIL Score
To qualify for a loan from a bank or other financial institution, your CIBIL score needs to be 750 or above. However, if you meet the other requirements for a house loan with Piramal Capital and Housing Finance, you may be eligible for a loan even with a CIBIL score as low as 650.
If you are salaried and want to apply for a mortgage, your pay slips will serve as proof of income. Employees who are paid in cash, such as housekeepers, drivers, etc., can apply to Piramal Housing without submitting a pay slip. This feature proves vital for people working in informal economic sectors.
Business owners, sole proprietors, and others in similar professions often have their house loan applications denied because their monthly income fluctuates often. These applications are reviewed and approved by Piramal, who works with entrepreneurs and freelancers to create unique repayment plans.
Proprietorship firm employees
Companies that are sole proprietorships are not required to register under the Companies Act or the Establishment Act. There are unincorporated businesses that offer paid services to clients both online and offline. Workers of proprietorship firms are also more likely than those of corporations to get their pay in cash, and not necessarily on the same day of the month. Moreover, to lend the customers, Piramal also loans to the staff of these companies.
Borrowers might get up to 30 years to pay back their loan from Piramal Capital and Housing Finance. Repaying a debt over a longer period means the borrower may spread out the cost of repayment. This means lower EMIs.
A convenient method of recording information
The application process at Piramal Finance is easy for potential borrowers. Borrowers can apply for a house loan from Piramal Capital and Housing Finance even if they don’t have pay slips proving their employment with the company for at least a year. Self-employed borrowers can apply for a house loan via Piramal Capital and Housing Finance with minimum paperwork.
When you apply for a loan with Piramal Finance. You will have access to a personal finance expert who can answer any questions you may have. They will also help anyone looking for a home loan, and find the best options for their unique needs.
The Bottom Line
To learn more about home loans and the application process, read similar blogs on the Piramal Finance website.