If you have been planning to buy your dream home for quite some time now, this can be an excellent time to turn your thoughts into a reality. With several benefits offered by the Government for home-buyers, stagnant property prices, tax benefits, and excellent facilities by banks and other financial institutions, you are sure to experience a host of benefits when buying a new home.
LIC being a renowned loan provider in the country is a preferred choice for several buyers. With multiple rate cuts in the past few years, LIC home loan interest rate too, has reduced considerably, making it a financially beneficial choice for the buyers. But when taking a home loan from LIC, ensure that you do get the benefits mentioned below.
1. Tax Deductible Processing Fee
The majority of the buyers are not aware of the fact that the charges related to home loan do qualify for tax deduction. Under Section 2(28a) of the Income Tax Act, such additional charges are considered as interest paid by the borrower and are eligible for tax deduction. Many other charges also fall under this category excluding the penal charges.
2. Use Proportionate Release Option
If you are looking to take a home loan for a house that is still under construction and the project is from a reputed builder, you can benefit from the proportionate release option. With the help of this option, the financial institution will get in a mutual understanding with the developer to allow you to pay the down-payment in installments.
3. Pay More Down-Payment
When buying a home, a buyer is usually required to pay the down-payment of about 10% to 15% of the cost of the property while the rest is offered by the financial institution in the form of a loan. You can try to collect more funds for the down-payment and try to pay up to 20% or even more to save on the interest that you will pay on the amount you borrow from the financial institution.
4. Prepaying the Home Loan
Once you have taken a LIC house loan and started repaying the same in EMIs, you can also take advantage of the pre-closure option to prepay the loan in parts or in full to significantly save on the interest you’ll be paying on loan. However, remember that financial institutions charge a prepayment penalty if the loan is prepaid far earlier than the actual tenure.
If you are searching for a home loan, try LIC home loan EMI calculator to know the amount you’ll be required to pay on a monthly basis when you take a home loan in India from LIC. And when you take the loan, remember the tips mentioned above to gain maximum benefits.