Five Perks Of Taking A Home Loan
Taking up a house loan even if you have sufficient money to buy one has benefits too. Availing a house loan can save you from taxes, allowing you to grow your funds. A well-managed loan is truly a great benefit and can help you achieve your dreams. 
Home Loans: A Boon
A home loan is a tool that profits hundreds and thousands of people. This financing facility, like home loans, comes with numerous benefits to tempt aspiring homeowners. Home loans usually come with a low-interest rate and are considerably cheaper when compared to other types of loans. Unlike other loans, there are zero prepayment penalties on home loans with an adjustable/floating rate of interest. Below are mentioned five advantages for you when availing a home loan.
- Save money on taxes.
A home loan is considered the biggest tax-saving tool, due to the numerous tax deductions available under sections 24, 80C, 80EEA of the Income Tax Act. People who are eligible for home loans can claim up to Rs. 5 lakh, which can reduce their tax liability by 1.5 lakh rupees if they fall under the 30% income tax bracket.
- Opportunity to grow funds.
Even if you have your pockets full of enough money to afford a house, you may be better off opting for a home loan to save on your taxes. The funds you save on taxes could be used for investing to earn an attractive and promising return. For example, the current rate of interest on the adjustable/floating home loans ranges between 7.05 % to 8.30 % per annum, depending on your credit score, loan amount, and loan tenure. Thanks to RBI’s directive to lenders to link loan rates to the benchmark rates, these rates are at a record low.
On home loan with an 8% rate of interest, suppose the total amount of your home loan is Rs. 3.5 lakh a year, and you will be able to wear out the entire deduction available under section 24 and section 80EEA. Therefore, if you fall under the 30% tax bracket, you will be saving on tax up to Rs. 1.5 lakh. As a result, you can earn a higher return on your invested fund and pay a lower effective interest on your home loan, depending on how much tax you can save.
- Liquid cash benefits.
You can go for a home loan even if you have enough money to afford to buy a house. A home loan using your own money may cost you more than just the interest rates. So why would you want to use your funds and buy a house? You can opt for going with a home loan and save your funds for protecting you against life’s uncertainties and help you meet other critical financial goals.
- Due diligence by the bank.
The bank that is offering you with a home loan exercises strict due diligence of properties before financing them. This due diligence will save your risk to a great level. The bank will verify the project-related documents, its headings, and legal clearances before approving a home loan on it. So you are more secure when you take a home loan from the bank that has already approved the project compared to unapproved projects.
- No lock-in of funds.
Buying a home in India is no joke and can be extremely expensive. Even if you have the resources to purchase a home without a loan, it is not advisable to do so. You may run into an emergency at any point, and it can be hurtful if you have a pile of money locked into real estate. Another thing to keep in mind is that you will not be getting high returns from homes compared to the stock market or mutual funds. Keeping your cash in liquid means that you can diversify your investments. Opting for a home loan and paying off the EMI’s on time can improve your credit score as well. Having an excellent record on home loans makes it easy for you to finance other purchases like car loans and your child’s student loan. 
Wrapping it up
Owning a home now with the help of a home loan has become easier than ever before. There are several pros of taking a home loan than using your liquid cash for purchasing one, as mentioned above. So, wait no more and go over to your nearest bank to get yourself a spacious and beautiful home!
