Home Loan: Points to Remember

Apr 12, 2011     Posted under: Home Loan

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  • Increase your loan eligibility
  • Credit History: Chances of getting a home loan are increase if one has a good credit history which is known by banks by checking the borrower’s CIBIL Score. It becomes very hard to get a loan from another bank when borrower has a bad debt with one bank.  CIBIL takes into account all you banking information – credit card/debit card payments. It is very important to know that even if you are guarantor to someone and there is a fault in the payment of that person, your score will also come down. BE pretty sure whenever you are acting as a guarantor to someone.
  • Clubbing of Income: Eligibility of taking a home loan will increase when you club your income with your spouse’s income (you can include income from your parents, external sources like rental, etc) bank in this case will calculate total eligibility on the basis of clubbed income from all sources. It becomes imperative to consider this in order to enhance loan eligibility.
  • Enhance Your Loan Tenure: Longer is the loan tenure, lower will be the EMIs which further increases the repayment capacity (reduces monthly load by lowering EMI) of the borrower and this in turn enhances the loan eligibility.
  • Step-up Loan: In this type of loan EMIs remain low in the beginning and increase gradually as and when the borrower’s spending power increases. Therefore, lower EMIs in the initial years enhance the borrower’s ability to pay and further increase the loan eligibility.
  • Increase the down payment: One must know that in a home loan bank finances only 85 to 90% for the property and the rest of the amount has to be funded by the borrower. So, one must increase the down payment if one possess more than required amount which will lessen debt considerably.

Tax Benefits in Home Loan:

  • The home loan borrower enjoys Tax Benefits on both Interest paid & the Principal re-paid. Under Section 24(d) of Income Tax, the deduction of interest payable on the home loan is up to a maximum of Rs. 1, 50,000.
  • Under Section 80(c) of Income Tax, Principal amount for the repayment of loan along with other savings & investments is eligible for tax deduction up to a maximum limit of
    Rs. 1, 00,000.

NitiN Kumar Jain

Nitin works in an IT MNC professionally but blogs and owns NKJ Live. He is also the co-owner of a professional start-up ARGHAM BYTES

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  • http://nitinkumarjain.in NitiN Kumar Jain

    That’s a very good article Amit … keep it up …

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