Home Loans- Tips for savings

Vikas AgarwalJanuary 25, 20171.25K views

Home loans play an important role in one’s dream of purchasing a house. When these loans are taken and house purchased there are a lot of apprehensions about payments to be done through EMIs. After a while, people realize that they are paying a higher EMI or a high-interest rate. Then, they start looking for alternate options for transfer of loan. Here are a few options which can be thought of in prior for a reduced repayment amount:

itial stages of a loan, there should be awareness of what is happening in the market and comparisons drawn as to what benefits can be got if the loan is switched over. Many times savings can be had in this regard. If this is done in initial stage it would be advantageous as during this period an individual ends up paying more interest amounts than the principle amount.

Repayment capacity- At any point in the loan period if it is found that repayment of more amount can be done, renegotiate the loan terms and paying more EMI can be helpful.

Keep shorter loan tenure – If loan tenure is minimum the interest amount to be paid is also less. Similarly, longer loan term will attract higher interest amount.

Under section 24 of the Income Tax Act, an individual is allowed to make a certain deduction from the Net Annual Value of his house property. In case an individual takes a home loan for purchase, construction, repair, renewal or reconstruction of his house property – the interest is allowed as a deduction from the Net Annual Value. The total amount allowed towards this deduction for a self-occupied house property is Rs 2,00,000.

Thus, taking an informed decision will certainly be beneficial in the long run. And, the amount that can be saved will definitely be a substantial amount.

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the authorVikas Agarwal

Vikas Agarwal is an IIT-Varanasi graduate in Chemical Engineering. He is the Founder and CEO of Finaacle.com - an investment advisory website. He is a Business Development Professional but a Value Investor at heart. He writes articles on Finaacle, which focus on simplifying the art of investing and the causes of human misjudgment when it comes to investing. He also shares his experiences as an investor and lessons from some of the greatest investors of all time.