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Pros And Cons Of Joint Home Loan

A joint home loan is a loan taken by two or more people with the intent of availing a higher loan amount along with equally shared responsibility of repaying the loan. The co-applicant shares the liabilities and benefits of the home loan with the primary applicant. This co-applicant may be the primary applicant’s spouse, parent, child, or friend. There are several pros and cons to applying for a joint home loan: Pros of Joint Home Loan: Eligibility: Factors like credit score, stable income, and other factors affect an individual's eligibility for a home loan. Hence, applying with a co-applicant reduces the primary applicant's credit risk and increases his chances of getting a home loan. Avail of higher Loan Amount: If both applicants in a joint home loan application are income-earning individuals, this helps in calculating home loan EMI affordability. This means the loan amount becomes considerably higher than for a single applicant or individual. This offers significant room for budgeting for a better home for both. Let’s look at an example here – Your sights are set on a house that is valued at Rs 40 lakhs, however your income status and bills only make you eligible for a home loan worth Rs 20 lakhs. Here, applying with a co-applicant can help. Both your combined financial status will allow for a larger home loan amount hence giving you access to the house of your choice. Interest Rates: Home loan interest rates can be lowered if a co-applicant is female. Since banks in India offer comparatively lower interest rates on loans given to women, including a female applicant on a joint home loan application is highly beneficial. Longer Tenure: Adding a younger co-applicant can help you extend the tenure of your loan, giving you greater repayment flexibility. A joint home loan can be taken with a child as a co-applicant to increase your loan tenure. Tax Benefits: A number of tax benefits are available for both the primary and secondary applicants on a joint home loan. The percentages depend on their contribution towards the principal and interest rates of the loan. Either applicant can avail of tax deductions of up to 2 Lakhs on interest repayment and up to 1.5 lakhs on principal repayment. In case of a rented property, the benefit of the entire interest rate can be availed. Cons of Joint Home Loan: Longer Documentation Process: Since a joint home loan involves two or more applicants, the documentation process is usually longer. The lending organization has to verify the credit history of both applicants. Lending organizations also have to ensure that each applicant submits the required documents individually and that these documents are accurate and not forged. This process can be tedious and time-consuming, which in turn delays the disbursement of the loan. Share of property: Co-applicants only get a limited share of property on a joint home loan. Thus, in case of the untimely death of an applicant without a properly documented will, the co-applicant is only left with less than half a share of the co-applicant’s. The rest is shared among the co-applicants parents, spouses, and children. Credit Score: Since a joint home loan offers flexibility or autonomy in sharing responsibility, such as who repays what amount, it also means that the credit scores of both applicants are equally at stake. Failure to pay loan installments by either applicant will affect the credit scores of both applicants on a home loan application. Separation of loss of a co-applicant: In the case of separation from a co-applicant, let’s say, in the case of a married couple, the entire responsibility for repayment of the loan then falls on the primary applicant. The same thing happens in case of losing the co-applicant to an untimely death. In such cases, it is always advisable that individuals apply for life insurance to avoid unexpected financial burdens. [B-02] Conclusion: Thus, we can see that a joint home loan can be extremely beneficial in many ways for new homeowners, provided one is aware of the risky paths to be avoided. A joint home loan can allow aspiring homeowners to realize their wishes quickly if planned carefully and chosen well.

08-11-2023

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Tax Planning: Its Importance, Investments to Consider, and Steps to Tax Planning

Saving the right amount of tax depends on your income tax planning. Certain tools will help you save tax by extending the Income Tax Act’s deductions. But don’t worry! It is not as complicated as it seems to be. If you take the necessary precautions and steps that promote legal tax savings, it can benefit you. Start your tax planning process by understanding how much you want to save. After that, you can determine your risk appetite and see the amount of tax exemption you could get from those investments. This way, you can meet your financial goals quicker with a balanced amount of tax that you would have to pay. If you keep delaying your tax planning, you might save no money. So, keep all your plans ready to protect yourself from the rush and stress that comes as the ITR filing date is nearing. [B-01] Types Of Taxes Direct Tax: This tax is levied on and paid by the same person. The burden of these taxes cannot be shifted to another. For example, income tax. Indirect Tax: This type of tax is imposed on the goods and services that the customers avail. Hence, the burden of the tax shifts to the person purchasing the goods and services in the end. For example, GST. They are an essential fiscal policy tool of the Government. The authorities determine the tax rates, and everyone paying taxes must abide by them. Importance Of Income Tax Planning The benefits of tax planning extend beyond a single fiscal year. It allows you to understand your future financial goals and helps you achieve them. A long-term investment yields a higher return than a short-term one. Special investments can be added to your income tax planning process. We will read about them later in this article. They instill a sense of healthy spending within the mind of an individual. This is because they motivate you to keep aside some of your income for investments that will help in tax savings. The investments offer tax savings, returns, and transparency that build investor confidence. Many deductions mentioned in the Income Tax Act can be availed if the investments are made smartly. Tax-exempt securities can play a major role when tax planning is done. Investments To Consider During Tax Planning Here are certain investments that are to be included in your income tax planning task so that you can avail of the deductions during ITR filing: Fixed Deposits: Section 80C of The Income Tax Act, 1961, allows you to avail of a deduction of up to INR 1,50,000 if you invest in tax-saving fixed deposit schemes. However, your money will be locked in for 5 years, and you must pay taxes on the interest rate ranging from 5% to 8%. Public Provident Fund (PPF): In this, you have to open a PPF account with a bank or a post office. You will be given a fixed interest rate on your investment, and up to INR 1,50,000 can be saved through section 80C. National Savings Certificate (NSC): Under Section 80C, mid-level investors can enjoy tax benefits with the bonds issued. With a savings account in a bank or a post office, you can buy an e-certificate through online banking. Unit Linked Insurance Plan (ULIP): These offer you a chance to choose between debt and equity investments, and you can shift the allocation. You can avail of tax savings under Section 80C and 10(10D). Life Insurance: These plans not only provide security for you and your family, but they also have a lot of tax benefits. Under Section 80C, the premium paid is tax deductible up to INR 1,50,000, and the amount received on maturity or death is tax-exempt under Section 10(D). Tax Saving Mutual Funds: These are also called equity-linked savings schemes. The lock-in period is 3 years; investors with a medium or high-risk appetite invest in these. These investments are deductible under Section 80C; in case of death or maturity, they are free from tax under Section 10(D). Mediclaim: These offer deductions under Section 80D. For senior citizens, the tax benefit is INR 20,000, and for other citizens, it is INR 15,000. So, if you have a policy that includes you and your senior citizen parent, you can get a tax benefit of INR 35,000. Steps In Income Tax Planning Keep your tax planning perfect to avoid panic when it is time for ITR filing. Here are the steps you need to know: Don’t Consider It to Be Cumbersome: This is one of the biggest mistakes you can make when considering starting your tax planning. The procedure is simple and can be done with careful consideration. Start At an Early Stage: Do not delay the planning until the date of ITR filing comes near. Also, tax planning is a continuous process and does not stop until the ITR is filed. Calculate Your Taxable Income And Tax Liability: If you know your tax liability, you will be able to estimate the amount of tax savings you have to make. So, to save on tax, you need to invest in assets that offer this benefit. Know Your Risk Appetite: Estimate the risk you are willing to take. This will help you decide on the right investments for your portfolio. Invest: The final step in income tax planning is to invest your money in tax-saving investments based on your risk appetite. [B-02] Key Takeaways There is no cap on the number of tax-saving investments you can make. So, pay close attention to your tax planning and maximize the benefits. Different assets have different tax-saving limits. Do your research correctly and be a smart taxpayer. Piramal Finance offers you relevant information regarding multiple banks across India. You can visit our website for any banking loan-related query or understanding of tax resolutions. The financial experts will help you better understand your bank account and make informed financial decisions.

08-11-2023

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Features And Benefits Of Home Extension Loan.

Human beings are built of dreams and aspirations. As we grow, so do our dreams and the need for bigger space to accommodate those dreams. But it is not always in our budget to afford that space or that construction. As our children grow up or our parents grow older and decide to move in with us, the need for their personal space arises. At this point, we either need to buy a bigger house or expand our existing one. Since buying a newer or bigger house is not the most practical solution, because it involves total uprooting, usually, people go for home expansions. Even though construction of expanding areas in a house also needs funding, this is comparatively lower than buying a whole new house. A home extension loan is your support for realising your dreams, for providing you access to comfortable living, and allowing the maximum potential for growth as a family. [B-01] So, What is a home extension loan? A home extension loan is a loan availed with the intention of making construction-related changes to an existing home. This change can be in terms of any structural changes to the existing house. There can also be any extensions in the form of new floors consisting of bedrooms to accommodate newer family members, children, spouses or parents, and in-laws. Sometimes, homeowners may decide to open up recreational areas in the form of a gym/pool, maybe a personal office space, a dedicated puja room, a home theatre, or simply a bigger entertaining space. To fund this change or expansion, homeowners may opt for a home construction loan. Who can avail a home extension loan? A home extension loan can be applied for by anybody, given the applicant has the capacity to repay the loan and also holds a good enough credit score. One can apply for a home construction loan individually or jointly with a co-applicant. If an individual already has taken up a home loan, he or she may choose to take up a home extension loan from the same providers or lenders as an extended facility to the existing loan. And like a regular home loan, all co-applicants will be equally liable in repayment of the home extension loan too. To put into better perspective, home construction loan eligibility is calculated by looking at an individual’s financial background in terms of Age (21 -70), kind of job (Salaried/non-salaried), the credit score (750 and above). Even outside of this, a background check involves several other factors like the applicant’s income, assets and liabilities owned, etc., evaluated by the lender before lending the loan. Let’s look at a few benefits of a home extension loan: Interest Rates: Home extension loans have extremely attractive interest rates. These are mostly similar to home loans but again depend on the income and financial stability of the applicant. The applicant may opt for either an adjustable-rate loan where the rates are reset periodically depending on the market or fixed interest rates that remain constant throughout. Tax Benefits: Home construction loans also provide highly generous tax benefits somewhat similar to a home loan. This means applicants may enjoy up to 2 lakhs on the principal component and up to 1.5 Lakhs on the interest component of the home construction High Loan to Value Ratio: What this means is home extension loans cover high costs. This usually covers 100% of the costs involved in construction or close. Tenure: The tenure to avail of a home construction loan is usually a maximum of 20 years. However, again, like all things above, this too depends on your age, income, and other supporting conditions at the time of application. Documentation: The documents required for a construction loan are typically simple and straightforward. These mostly include: Identity proof Age proof Proof of income (salary slips or bank statements) Estimated construction plans (approved by local authorities) [B-02] We can conclude that home extension loans are fairly easy to obtain and are a better option compared to buying a new house or taking up a home loan.

08-11-2023

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Things You Must Know Before You Avail A Home Renovation Loan

Your home is your safe space and it needs to be in robust conditions in order to serve you with that safety. With time, our house loses its shine and it needs our attention in terms of repairs. It is extremely important to care for our home because over time, external conditions like rain or calamities as well as internal conditions like old faulty electric systems can quickly turn dangerous. Hence refurbishing should be a regular practice to maintain the quality of your property. But remodelling or repairing a house is like servicing a car – it can be expensive. Material and labour costs are increasing every day. Here, let us get to know about home renovation loans. A home renovation loan is a loan taken up for the expenses of renovating or repairing a house. It is the best way to finance a home improvement but not a lot of people are aware of it. Use cases may include any repairs in a faulty system, such as painting the house’s interior or exterior, plumbing, upgrading the electrical system, waterproofing the ceiling, and more. It helps homeowners increase a house’s retail value as well as its aesthetic appeal. Here are some things you should know about before you avail of a home renovation loan: [B-01] After Renovation Value A home renovation loan amount is calculated on the basis of one key factor – the value of the home post renovations. Instead of a house’s current value, lenders or banks bank on a home’s estimated post-renovation value to calculate how much an applicant can borrow. This provides the opportunity to avail higher amounts on an improvement loan. Renovation loans are the ONLY type of loan that provides credit based on future value. Also, since real-estate values only ever go higher, home renovation loans are in fact a great investment on top of being a loan. In case you wanna sell the house someday, you will have great value for your property. Home Renovation Loan Interest Rates Home renovation loan interest rates vary from applicant to applicant based on their CIBIL score, amount availed and tenure of the loan based on one’s capability to repay the loan. These rates are usually lower for renovation loans as compared to traditional home loans. One can opt for a fixed rate arrangement or even a floating interest rate model. It is important to compare different banks and lenders and their respective interest rates online before deciding on the best home renovation loans for you. Depending on your needs, different banks might provide customised features. Home Renovation Loan Eligibility The criterion for a home renovation loan is fairly straightforward : The applicant needs to be within 18 – 65 years of age at the time of application. The applicant must be either a resident or an NRI. The applicant may be salaried or self employed. The applicant must have a permanent residence or a rented residence which they have rented out for over 12 months. A good credit score of at least 700 or more. Home Renovation Loan Documents It is important to be prepared with the necessary documents in order to process a smooth eligibility check : Proof of identity (Aadhaar card, passport, driving license, Voter ID, etc.,) Proof of residence (water/Electricity bill, Aadhaar card, passport, driving license, etc.,) Proof of Income (salary slips, bank statements) Improvement/Renovation plans (received from civil engineer/architect) Home Renovation Loan Tenure Home renovation loans are available for a tenure of up to 1-5 years. Repayment options are flexible too. [B-02] Home Renovation Loan Fee There is usually a small percentage of the loan amount charged as processing fee. This percentage mostly varies from 1-3% depending on the lender. Therefore it is important to compare different loans before you come across the best home renovation loans. With some research and planning, home renovation loans can be an important tool in improving living conditions for individuals and in turn building up to greater real-estate value for their home.

08-11-2023

Health Insurance

Why Is It Necessary For You To Get Health Insurance?

A medical emergency can strike anyone anytime, and the last two years have been a reminder of the same. Emergencies don’t just bring physical and mental strain. They also bring a lot of financial stress. You can’t plan when to get sick or hurt in advance based on when you will have the money to afford the proper treatment. Medical bills and healthcare expenses can add up very fast. Heavy medical expenses can drain your life savings. Thus, having a health insurance policy can be helpful. A good health insurance plan can ensure you are ready for unplanned medical expenses. You can deal with any emergency without worrying about your savings. Keep reading to learn more about why you need a health insurance plan. We will also be taking a look at how an insurance plan can help your health and finances. [B-01] What Is A Health Insurance Plan? A health insurance plan is a type of insurance that assists you in paying for medical expenses. The insurance plan can pay for your medical bills or reimburse them for your expenses. This applies to all insurance policyholders. The right insurance policy can also provide you with round-the-year medical check-ups. This can help prevent any disease or identify symptoms at an early stage. You can get proper medical care with the help of health insurance. It can protect you and your savings. It can provide you with that extra layer of security in your life. Importance and Benefits Of A Health Insurance Policy We live in an uncertain world that is constantly changing. In today’s day and age, a health insurance policy has become a necessity. You and your family can get many benefits by having a good health insurance plan. Everyone knows that “Health is Wealth,” and health insurance can help you take care of both. Let us take a look at why you should have a health insurance policy in place and what benefits it offers: Rising Healthcare Costs In recent times, inflation has affected all aspects of our lives, including healthcare. Everything that we need in our everyday lives is getting expensive. The costs of healthcare and medical treatments are also rising. Indians have spent more than twice as much per hospital visit on medical costs over the past ten years. This was recently highlighted by a Statista report. And this is true for people in all age groups. The rate of inflation has been higher than the returns you get on your savings. This is why dealing with a medical emergency can take away a person’s life savings. It can leave them with a financial burden, along with a new health problem. This is where an insurance policy can play an important role. The right insurance policy can help you seek proper treatment. You can get medical care without having to only rely on your savings. This can be a huge sigh of relief and allow you to receive proper care without going broke. Changing Lifestyles & Chronic Diseases Both the world and people’s way of life are evolving. Conditions that used to only used affect the elderly are now starting to affect younger people too. This includes problems such as diabetes, high blood pressure, joint pains, and more. Most of it has to do with how unhealthy the average lifestyle has become. But you can avoid most of these problems and deal with them in a better manner. If you can detect their symptoms at an early stage, the chances of recovery increase. To help you, many health insurance plans offer all-expense paid medical check-ups. These complimentary checkups can identify chronic diseases at an early stage. This can help you better tackle the disease or condition. Inadequate Insurance Cover Many people don’t get a proper health insurance plan because they get one from their company. But many people don’t realize that this is a group plan, and it doesn’t provide complete coverage. An employer-sponsored healthcare plan is very limited in nature. It does not provide all the benefits that a proper individual insurance policy can. These plans also have very limited coverage for your family members and dependents. Having a suitable health insurance plan can be a boon for you and your family. Tax Benefits The financial benefits of a health insurance plan are more than what you may think. It can also help you get tax benefits and tax breaks. Your payments towards your health insurance premiums are eligible for tax deductions. This comes under different sections of the Indian Income Tax Act. These benefits are for people across various age groups and tax brackets. You can deduct the cost of policies you buy for your family members, such as wives, parents, and children. This is besides the tax deduction you get on your health insurance premiums. Better Medical Care A good health insurance policy gives people the freedom to choose good medical care. Often, what stops people from taking proper care of their health is the lack of funds. They don’t want to harm their savings, so they avoid proper medical care. This can result in their health troubles getting worse. A good insurance plan allows people to choose the best healthcare option for them. Not only this, but they can also provide better care for loved ones. You can choose to take care of yourself and your loved ones without any problem if you have a good insurance plan. [B-02] Final Thoughts We can say that a health insurance plan is a necessity. Experts suggest the earlier a person can get insured, the better and more affordable it is. Health Insurance allows people to invest in their health and their future. If you need help with finances, you can always take the help of a financial expert like Piramal Finance. They will suggest what’s best for you and help take care of your personal loan requirements if any.

08-11-2023

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What Are The Eligibility Criteria To Get Subsidized Loan With PMAY?

The Pradhan Mantri Awas Yojana is an initiative by the Government of India that aims to provide affordable housing to everyone in India. It allows first-time homeowners in India to get subsidies on their first property purchase. [B-01] What is Pradhan Mantri Awas Yojana? The Pradhan Mantri Awas Yojana is a government scheme that plans to make housing affordable for everybody in India. It offers subsidy on home loans taken for the following: Purchase of a property and construction of a home Purchase of a property Construction of a home Extension of existing house (adding a room, kitchen or bathroom) Only first-time homeowners who don’t have a ‘pucca’ house named after them or their family member are eligible for this subsidy scheme under the Pradhan Mantri Awas Yojana. If you are eligible for Pradhan Mantri Awas Yojana and have applied for a home loan at Piramal Finance, then you can get home loans with extremely low interest rates. Owing to the credit linked subsidy, the interest rates can be as low as 6.5%. Eligibility criteria to get subsidized loan with the PMAY Here are the eligibility criteria that make you eligible for a subsidized home loan with the Pradhan Mantri Awas Yojana. Here are the eligibility criteria that make you eligible for a subsidized home loan with the Pradhan Mantri Awas Yojana. You or your family should not own a ‘pucca’ house in any part of India. In case a married couple is concerned, any one of them or both of them in joint ownership will be eligible for the scheme a single time. You should not have availed any housing assistance from the Central Government or under the Pradhan Mantri Awas Yojana. Employment Type Both salaried and self-employed individuals can apply for a home loan at Piramal Finance, under the Pradhan Mantri Awas Yojana. Under salaried applicants: Any person working in a government institution or a PSU office is eligible under this category. People working at private limited companies, MNCs, NGOs and trusts are also considered salaried applicants. Under self-employed applicants: This category includes self-employed professionals who are doctors, lawyers and chartered accountants. Other than this, self-employed non-professionals and business owners can also apply under this category. Age For salaried individuals – Any salaried individual over the age of 21 can apply for a home loan at Piramal Finance. The maximum age to apply for a home loan is 70, in case of ex-government employees receiving pension. In all other cases, you’re only eligible till your age of retirement. For self-employed individuals – Any self-employed individual between the age of 23 and 70 can also apply for a home loan at Piramal Finance. Documents Required Proof of identity (Aadhar card, voter ID Card, passport, driving license) Proof of residence (Aadhar card, voter ID Card, passport, driving license, utility bills) Proof of income (ITR of the last 2 financial years, financials audited by a chartered accountant, banks statements with salary slips) Documents of the property Co-applicant: A co-applicant is mandatory in certain cases. A co-applicant can be your spouse or a first-blood relative like your parents, siblings or children. They have to be over the age of 18 and a woman, in many cases. [B-02] Key features of PMAY subsidized home loans Credit linked subsidies: With PMAY, you can get subsidies up to Rs. 2.67 lakhs on loans of Rs. 6 lakh or less. This can help you build a home and not spend a fortune. Low interest rates: If your household income is less than Rs. 6 lakhs per annum, then the interest subsidy could be as much as 6.5%. If it is between Rs. 6 lakh and 12 lakh per annum, then the interest subsidy can be 4%. If it is between Rs. 12 lakh and 18 lakh per annum, then the interest subsidy is 3%. Easy application process: Piramal Finance has an extremely simple application process. A dedicated relationship manager will guide you through the entire process.

08-11-2023

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What is Flexi Loan and Benefits Of Flexi Loan

The Flexi loan is one of today's most popular loan options. You are sanctioned a loan amount where you can withdraw funds as many times as you want within the limit. Unlike a traditional personal loan, you do not get the full amount disbursed immediately in your account with applicable interest. Understanding Flexi Loan A flexi loan is just an overdraft facility. The limit is set, and interest is levied only on the amount you withdrew and not on the complete loan amount sanctioned. You can use the funds for any purpose and also repay the loan as you please. This is a great option for people looking for a flexible personal or home loan option. Benefits of Flexi Loan A flexi loan allows you to use your money when required without filing multiple loan applications. This is one benefit to mention. Have a look at the several benefits that the Flexi loan offers to its borrowers: Interest-Only EMIs:Loan repayment is a matter of concern. With a Flexi loan, you can pay interest as well. Paying off the loan, therefore, becomes easier. Withdraw When NeededThe amount of loan you are sanctioned need not be withdrawn at once. You can withdraw it as per your business investment plans and pay interest only on the amount withdrawn. You can use this amount to repay your debts or pay your home loan EMI. Flexibility in RepaymentYou have the flexibility to repay the loan amount when you want. You can also make no-charge part pre-payments. Low EMIThe option to withdraw funds from the Flexi loan as and when required lowers your monthly EMI. Refrain From Multiple ApplicationsWith traditional loan options, you must file multiple applications for each requested loan amount. However, with a Flexi loan, you can withdraw as many times as you want from the amount limit without submitting multiple applications. It saves hectic paperwork. Instant ApprovalOne of the most essential benefits of a Flexi loan is you get its approval and money in your account within 24 hours. So, it helps you in executing your instant business plans. Documents Required for Flexi Loan at Piramal Finance Just like when you apply for a home loan, Flexi loans require the borrowers to submit a few documents for verification. You can easily apply for a Flexi loan at Piramal Finance by presenting the documents listed below: PAN Card ID ProofAny Aadhaar Card, Driving License, Passport, or Voter’s ID Card. Address ProofAny of – ID proof with the permanent address, telephone bill, water tax, electricity bill, post-paid mobile bill, or property tax receipt. Property Document Sales deed or the letter of allotment NOC from the builder/housing society, possession certificate, detailed construction cost estimation Bank account statement Occupancy certificate in case of the constructed apartment Eligibility criteria for Flexi Loan at Piramal Finance There is a basic set of eligibility criteria that an applicant must fulfill to apply for a Flexi loan at Piramal Finance. Salaried and self-employed individuals have different sets of eligibility criteria. These are as follows: For Salaried Applicants Particulars Criteria Age 21 years to 70 years Employment Type Government InstitutionPrivate SectorPublic SectorMNCs or Related CompaniesPartnership FirmsProprietorship ConcernNGOs or Related Organisation For Self-Employed Applicants Particulars Criteria Age 23 years to 70 years Employment Type Self-Employed Professional like Doctor, Architect, etc.Business OwnerProprietorsPartnersPartnership Firms, etc. [B-02] Bottom Line Applying for loans and fulfilling your financial requirements have become easy with the easy-to-avail Flexi loan options. At Piramal Finance, you can easily apply for a loan online from the comfort of your home or office.

08-11-2023

How To?

How To Finance Your Home Renovation Using Home Renovation Loan

Home renovations are part of owning a home from time to time. Many people go ahead with home renovation plans to enhance the value of their homes and meet their families' needs. While the need for increased comfort can be one of the most common needs for home renovation, other common reasons are attempts to make the home more eco-friendly and sustainable. There can be many benefits of renovating a home. However, one of the aspects that causes many worries is financial. The financial requirement for renovating a home has been increasing, especially due to inflation. To meet these financial requirements, many opt for a home renovation loan. In this article, we look at the different elements of a home renovation loan and how you can finance your home with one. How to Finance Your Home With a Home Renovation Loan By availing of a home renovation loan with an interest rate and EMI that suits your financial capacity, you can renovate your home in any way you want. It is important to check for certain aspects before purchasing a home renovation loan. Let us have a look at each of these different aspects. Eligibility Home renovations are part of owning a home from time to time. Many people go ahead with home renovation plans to enhance the value of their homes and meet their families' needs. While increased comfort can be one of the most common needs for home renovation, other common reasons are attempts to make the home more eco-friendly and sustainable. There can be many benefits of renovating a home. However, one of the aspects that causes many worries is financial. The financial requirement for renovating a home has been increasing, especially due to inflation. To meet these financial requirements, many opt for a home renovation loan. In this article, we look at the different elements of a home renovation loan and how you can finance your home with one. How to Finance Your Home With a Home Renovation Loan By availing of a home renovation loan with an interest rate and EMI that suits your financial capacity, you can renovate your home any way you want. It is important to check for certain aspects before purchasing a home renovation loan. Let us have a look at each of these different aspects. Eligibility Interest Rate Tenure Tax Benefits Affordability In a Nutshell Availing of a home renovation loan can help you renovate and redesign your home with less financial stress. You can opt for a home renovation loan, ensuring that you meet the eligibility criteria. By meeting the eligibility criteria, you can increase the chances of getting your loan application approved. Moreover, it is also important to check the tenure and interest rate of the home renovation loan before applying to ensure that it aligns with your financial capacity. Interest Rate: Another key factor to check while applying for a home renovation loan is the interest rate offered. The home renovation loan interest rate can determine how much finances you need to repay the loan. It can also be an estimate of the financial burden you may experience. The interest rate you receive on your home renovation loan can also help you calculate the EMI and tenure. Tenure: The tenure of the home renovation loan is also important to consider as it will allow you to understand the flexibility you have to repay the loan. A longer tenure allows you more time to repay your loan with smaller amounts of EMI every month. On the other hand, having a shorter tenure will require you to pay larger amounts of EMI over a shorter period of time. Tax Benefits: With a home renovation loan, you can also experience tax benefits on the interest portion and the loan amount. Under Section 24 of the Income Tax Act, you can avail of tax benefits up to Rs. 1.5 Lakhs on your interest amount. Moreover, if your home renovation loan amount is used on home-related expenses, you will be eligible to avail tax deductions on the principal amount of your loan as well. You can avail of a maximum deduction of Rs. 1 Lakh on the principal. Affordability: The home renovation loan typically provides you access to funds at a lesser interest rate than a typical home loan. Hence, it is considered a much more affordable option than a personal or similar loan. You can also opt for a longer tenure, making the repayment process less stringent. [B-02] In a Nutshell Availing of a home renovation loan can help you renovate and redesign your home with less financial stress. You can opt for a home renovation loan, ensuring that you meet the eligibility criteria. By meeting the eligibility criteria, you can increase the chances of getting your loan application approved. Moreover, it is also important to check the tenure and interest rate of the home renovation loan before applying to ensure that it aligns with your financial capacity.

08-11-2023

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What Is The Minimum Cibil Score Required To Get A Loan?

The past few years have observed a drastic increase in the number of people opting for loans. While applying for any type of loan, one of the key parameters that are verified is your CIBIL score. This score is crucial as it helps banks decide the approval of your home loan application. A credit report comprises your CIBIL score that helps banks and financial institutions understand your creditworthiness. This is based on your repayment habits over a period of time. The bureaus typically collect data that includes individual consumers and lending institutions to provide information about your credit history and creditworthiness. A CIBIL score between 750 and 900 is recommended to borrow credit. The higher your score, the more likely you are to get your home loan application approved. A higher CIBIL score can also help you avail of such as higher loan amounts, lower interest rates, and longer repayment tenure. If your credit score is below 675, it is recommended to improve your credit score before applying for a loan. [B-01] Ideal CIBIL Score for a Loan The ideal CIBIL score varies based on the type of loans such as home loans, home construction loans, business loans, and small business loans. For a personal loan, most lenders have a minimum CIBIL score requirement of 750 as it is an unsecured loan. When it comes to a business loan, the lower limit of the acceptable CIBIL score is between the range of 600 to 700. For a home loan, many lenders require a lower CIBIL score requirement than a personal loan, thereby being in the range of 550-600. While meeting this minimum criterion is important, having a good CIBIL score of 750 or above can help increase the chances of approval of your loan application. In addition to increasing your loan approval chances, having a high CIBIL score can also reduce the typical hassle that comes along with having a low CIBIL score. Moreover, the ease of verification and disbursement can also be improved for individuals with a good or high CIBIL score. How to Improve Your CIBIL Score? Improving your CIBIL score can be done in a few ways. By being disciplined and consistent with these steps, you can improve your CIBIl score in no time. Here are 3 ways in which you can improve your CIBIL score. Frequently Check Your Credit Report: The first step is to get your credit report and evaluate it for errors and mistakes. Even if you have been paying on time, there can be scope for error which can affect your score negatively. You must ensure that you have been paying your bills on time at least 5-6 months before you apply for a loan. Pay Your Credit Card Bills on Time: Before applying for a loan, make sure that you have been timely with paying your credit card bills on time for the past six months. If you are consistently late in paying your credit card dues or are maxing out your credit limit, your credit score can be negatively impacted. Be Timely With Your EMIs: To have a good credit score, make sure that you pay your EMIs on loans and mortgages regularly. Running late on these payments can affect your credit score. Banks and lending institutions will look into your credit score to understand your potential repayment patterns. If you have significant debt from other loans, you can consider alternatives such as restructuring your loan. [B-02] In a Nutshell Different loans have a different CIBIL score requirement based on the nature and type of the loan. It can be beneficial to have a good CIBIL score to avoid any hassle during your loan application process and also speed up the process of approval and disbursal.

08-11-2023