Mortgage loans are availed either to buy a new property (residential or commercial), or are availed against an existing property to meet high-end expenses. To purchase a new property, one must opt for a home loan or a commercial property loan.
Secured borrowings like loan against property are preferred in case of acute financial requisites due to their long repayment tenure and considerably low Interest Rate on Loan Against Property. Being multi-purpose advances, loan against property covers a broader radius of financial needs which include:
- Education expense
- Urgent medical needs
- Wedding essentials
- Travelling to dream destinations
- Purchase of a new home or its renovation
- Setting up a business or expanding it
Below are some significant facts relating to mortgage loans:
- Tax Benefits
This cost-effective way of borrowing allows a debtor to enjoy exemption from paying income tax. According to Section 80C, tax exemption is allowed on the principal amount while repaying off the loan in EMIs up to Rs. 1.5 lakh per annum.
In case of home mortgage loans, a borrower is also eligible for income tax exemption of up to Rs. 2 Lakh towards the interest portion of the EMIs paid against the home loan in a particular financial year. Section 24(b) of the Income Tax Act explains it in details.
- High Financing Amount
Salaried borrowers can enjoy a loan amount up to Rs. 1 Crore from leading non-banking financial institutions like Bajaj Finserv. However, self-employed individuals may enjoy funding of up to Rs. 3.5 Crore, subject to meeting required eligibility criteria.
- Improves Credit Score
Timely repayment of a mortgage loan helps in improving one’s credit score. If you look to improve your CIBIL score, avail a secured loan from reputable lending institutions and pay the EMIs within time.
- Longer Tenure
With longer repayment tenure for mortgage loans, borrowers need to pay lower EMIs. Generally, banks and NBFCs offer tenure of 2 to 20 years for salaried individuals. Self-employed may get a tenor of up to 18 years to repay the loan.
- Easy Disbursal
The mortgage loan process caters to faster turnaround time of 72 hours with the requirement of a few basic documentation.
- Lower Interest Rate
Being a secured loan, mortgage loan interest rate is always lower compared to any unsecured loan, thus lowering the amount of EMIs to be paid.
- Allows Equity
This means a borrower has the freedom to use his/her equity of the home as collateral to avail second mortgage or Home Equity Loan.
- Top-Up Funding
Financial institutions offer top-up on existing loans to their customers. It is extremely beneficial if one requires surplus monetary aid.
- Comfortable Repayable EMIs
However, talking about EMI, it shares an inverse relationship with tenure and directly with the rate of interest. Longer the tenure, lower will be the EMI and vice versa.
Owing to technology, one can now learn everything related to EMI with mortgage loan calculator available online.
Mortgaging Against Different Property Types
A consumer can procure this secured loan by hypothecating:
- Residential property
- Commercial space
- Industrial estate
- Lease on discounting
- Under-constructed assets
Overall, a mortgage loan gives debtors a sense of ownership. A borrower might buy a home; one can have the pride of owning something without any down payment. Customers can also expand their business or consolidate debt by availing mortgage loans.
So, considering every dimension, this loan provides a win-win situation for its borrower just in lieu of his asset offering optimal assistance.
To sum up, a Mortgage Loan is a good credit because it’s secured and comfortably repayable. Make your ownership affordable with this secured loan and obtain financial bliss.