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Smart Money: Know your home loan

Apr 3

Smart Money: Know your home loan

Home loan might appear to be appealing but it comes with pack of equated monthly installments which is nothing more than a burden for its bearers. For the people who don’t know more about home loans, here you can learn about some of the important factors that can help reduce your home loan burden and prove to be of great advantage.

Home Loan is the type of loan that falls in the secured loan category. It can help you fulfill your dream of buying a house at your preferred location. Today, as a buyer, you can apply home loan online through some of the most trusted online platforms like Antworks Money and more. Moreover, you can also take the advantage of home loan offers announced by various banks from time to time.

Your CIBIL score plays a very important role and proves to be the deciding factor while availing any kind of loan. Customers with good CIBIL score and credit history can bargain and avail home loan at competitive interest rates and also gain the benefit of waiver on processing fee subject to certain terms.

Home loan is a long term loan with heavy EMI payable on monthly basis. Hence, it is strongly suggested not to make haste while applying for it. One can take the advantage of online platforms namely Antworks Money to compare the rate of interests on home loan and home loan offers provided by the various banks. Lower interest rates help in reducing the interest burden.

In addition to the above benefits, you can also save your precious time and stress by applying home loan online. You can apply anytime as there is no time restriction like bank branches operating only during the set office hours.

Thus, home loan is a way by which you can fulfill your dream of buying a house, but you have to work through the EMIs that have to be paid every month until the amount of the house along with the interest is paid. EMIs take a huge chunk from your income. However, you can make the home loan an added advantage after carefully scripting the entire process.

Here is how you can do it easily:

Keep Yourself Updated About MCLR Rate

Earlier, the repo rates used to fluctuate a lot. In the condition when RBI used to increase the repo rates, the banks were first to take its advantage by administering it on their customers who have already availed loans however, they were reluctant enough to provide the benefit decreased repo rates to their borrowers.

RBI realized this fact later on and so to make it transparent and decrease the unnecessary burden of increased interest on customers, it came forth with the rate that was based on the marginal cost of the funds of the bank. This rate was called as the MCLR and it shows the marginal cost offered by the banks to its borrowers.

MCLR here stands for Marginal Cost of Funds based Lending Rate.Today, MCLR works as standard rate for all its borrowers taking loan from the bank. In easy words, it serves as the interest rate offered by the bank. No bank can go to a rate below the lending MCLR rate.

The MCLR keeps on changing frequently and that has to be reflected in the bank’s loan lending services as well. Every bank is compelled to do so and the change in MCLR is also going to be reflected in any ongoing or floating loan of the company.

The change in the MCLR is quite evident however, it also ensures that the borrower gets the advantage of the fluctuating range of the MCLR and the interest rates are not spread unevenly across the borrowers.

You can certainly take the advantage of MCLR by closely monitoring it.

A Good profile and CIBIL Score for a Lower Interest Rate

Since a CIBIL score plays a vital role in the financial market, a customer with a very good CIBIL score and credit history can take its advantage. He or she can negotiate with the lending banks and take the benefit of offers on home loans, enjoy waivers on processing fee, and other benefits as a privilege customer.

This will help you save on your overall home loan investment.

Availing Tax Benefits

Home loan is entitled for the tax benefit. Under Section 80 C of the income Tax Act, principal repayment on the availed home loan entitles you for a tax deduction benefit of Rs. 1.5 lakh. Under Section 24 (b), you can enjoy additional benefit of Rs. 2 lakh on interest repayment. Above all, for the first time borrowers, a benefit of Rs. 50,000 under section 80 EE is also facilitated.

The saved tax helps in the reducing your overall burden on EMI payable on the availed home loan.

Thus, now you can not only fulfill your lifetime dream of owning a home at your desired location but also can save good amount of money by taking the advantage of the three key factors discussed above.

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