The Covid-19 pandemic has resulted in significant changes in our lives. Many jobs have been lost, businesses are adversely affected and the global and the Indian economy is witnessing an economic slowdown like never before. Naturally, real estate too has seen the effects of all of this. However, it is not just bad news for all of us.
For example, for people wanting to buy a home, this could be a favorable time. Many people have accumulated significant savings over the past one year due to the restrictions on travel and resultant savings on a host of other epenses. Some people have also started working on their part-time projects to get a second income, which is again a boost to their finances. Moreover, interest rates have also become favourable for home loans.
A home loan is an easy tool to finance your dream home. It helps you buy the house of your choice without draining your hard-earned savings. You can find a lender that offers you a low interest rate and low processing fees so that the loan is not a burden on you and you can repay it comfortably over the years.
Here are a few benefits of taking a home loan in current times:
Favourable Interest Rates
There has been a decline in the rate of interest on home loans. The home loan interest rates have fallen to as low as 7% as compared to 9-10% just a few years back. According to media reports, in 2020 the interest rate for home loans has reached the lowest level in 15 years. It could be profitable for you to avail a home loan at this interest rate and fulfil your dream of purchasing a house.
Ease In Processing
Currently, lenders and banks are encouraging online mode of loan processing. You no longer need to visit the bank or entertain bank officials at your home to process your loan application. You can carry out the complete home loan application from the comfort of your home through the online method. Moreover, banks have also started processing requirements like opening a bank account and verification of identity proofs online through video conferencing.
Tax benefits
There are various tax benefits on home loans. You can save a lot of money by applying for a home loan now. You can claim a deduction of up to Rs 1.5 lakh on your principal repayment amount under Section 80C of the Income Tax Act, 1961. A deduction is also available on the interest paid on the house loan under Section 24B, up to Rs 2 lakh.
Favourable GST rates
The rates of GST on home purchase have been reduced significantly over the past year. Currently, the GST rate for affordable homes has been reduced from 8% to 1%. Whereas for regular units it has been reduced from 12% to 5%. Though, in this new tax rate policy, the benefit of the income tax credit has been waived off. This reduction can help you save money when you purchase a house anytime soon.
Attractive features
As compared to the past years, lenders now offer various attractive features that make availing loans easier and faster. For example, an end-to-end online process for loan approval, zero down payment home loan, etc. If you want to avail offline services, you can also ask for doorstep service, where a bank official visits your home to help you complete the formalities and approve the documents.
There are many advantages of home loans if you are looking forward to purchasing a home in the near future. So, if you have been waiting for the right time to buy your dream home through a home loan, this could be the right time.
