How Can You Reduce Interest On Your Home Loan and What Are The Tax Benefits A Person Can Claim For His Dream House
Households in India are experiencing an increase in salaries. However, this is not enough to offset the rising house prices. According to a recent house affordability index released by JLL India, households in big cities are facing punitive house prices. Therefore, a home loan is becoming a necessary evil for many of thesehouseholds.
Now that you have home loan, how do you reduce the interest?
The average home loan in India comes with an interest of 9%. This rate might be high for many households but they should not worry themselves to death. One only needs to get knowledge about a few hacks that actually work.
Get a loan with a provider with cheap rates
While the average rate on home loans is 9%, there are providers who offer loans with interests as low as 8.30%. As such, it is incumbent on the households to conduct a thorough study of the loan providers to find the best offers.
Ensure you pay the principal quickly
Normally, the interest to a loan is calculated based on the principal amount. Therefore, the faster you pay, the lesser the principal amount and the lesser the interest.
The income tax act of India allows home buyers who have home loans to claim a deduction on the principal and interest payable. One can claim as much as Rs 1.5 lakh on principal and up to Rs 2 lakh on interest. Therefore, one should take a complete shelter under the law to exploit the benefits.