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Home Loans
Everyone has a dream of buying their own house. But with the immense rise in properties, such a dream remains a dream only for some people. This is where a home loan comes to the rescue.
What is Home Loan?
As the name suggests, a home loan is the amount of money an individual borrow from banks or other financial institutions after meeting certain loan eligibility criteria to purchase a residential or commercial property. The money borrowed has to be paid back to the lender in easy monthly installments (EMI) at a particular rate of interest. There are many banks and financial institutions that offer loans to help you buy or construct your dream home. Loans are also available for renovation or extension purposes.
Types of Home Loans
Benefits of Home Loan
Tax Benefits: A borrower can claim an Income Tax deduction of up to Rs. 1.5 Lakh under section 80C of Income Tax of India 1971 Act. While Section 24B of the Income Tax Act of India allows for a deduction of up to Rs 2 lakh on the interest portion.
The income tax deductions are only available after the house has been completed. You cannot claim income tax deductions while the property is being built.
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Tax Benefit on Second Home Loan: If you buy a second home, you will be eligible for an Income Tax deduction under section 24B of the Income Tax Act.
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Home Loan Balance Transfer: It gives you the benefit of a balance transfer to another lender with a lower interest rate.
Ease to Buy a New Home: It makes it easy to buy a new home with one’s own money because It makes it easier to buy a house because it can be repaid in easy monthly installments.
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No prepayment Charges: It has the highest repayment tenure that goes up to 30 years and by extending the loan tenure one can reduce the EMI liabilities.
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No Need to Pay Rent: It enables you to buy your own home so there is no need to pay rent. It is better to pay EMI for your own home.
Loan Eligibility
Loan eligibility refers to how much money you’ll get to buy a house and whether or not you’re eligible for a loan. To determine your home loan eligibility, certain factors must be considered, such as the applicant’s age, income, type of employment and property, credit score, and many others.
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Loan eligibility depends on some factors such as:
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Income
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Age
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Employment Type
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Annual Increment
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Credit Score
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Income Stability
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Property Details
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Outstanding Loans
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Residency Status
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Collateral Security
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Identity Proof (If any)
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Aadhar Card
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Pan Card
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Passport Copy
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Voter ID
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Driving License
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Employer Issued ID Card
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Photograph
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1 passport size
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Income Proof (Self Employed)
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Latest ITR
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P&L
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Balance sheet for 3 years
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Proof of Business for the last 3 Years
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Documents Required:
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Loan Application
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Application Form
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A cheque for the processing fee
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Address Proof (If any)
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Aadhar Card
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Passport
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Electricity Bill
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Telephone Bill
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Ration Card
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Lease Agreemen
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Income Proof (Salaried)
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Salary slip of last 3 Months
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Latest Form 16
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Latest Income tax Return
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Bank Statements
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Last 6 Months
Loan Prepayment
Home Loan Prepaymentt occurs when you repay your loan in full or in part before the scheduled repayment period. Prepaying your loan can assist you in your debt-reduction efforts.
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Prepaying your mortgage usually results in a lower monthly payment or a shorter loan term. In either case, prepaying your debt saves you money on interest.
Loan Application Process
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Fill out the application form
- Verification of documents
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Background check
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Obtaining your credit report
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Pay processing fee
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Evaluation of repayment capacity
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Processing the property documents
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Loan Disbursements
Home Loans at Connect Property
As we have considered what is a home loan in India, the next step should be to choose the best bank or financial institution that can make the best loan offers.
ConnectProperty gets you loan offers that can help you in getting the house of your dreams. ConnectProperty gets you a loan at attractive interest rates with 48 hours sanctions and a hassle-free process.