| |
| Q |
How
much housing loan can one get ? |
|
A |
Housing
loan will be sanctioned depending upon your repayment capacity
and according to your income. Your spouse's income can be
included, if you want to increase the amount of your loan.
The maximum loan that can be sanctioned varies with housing
finance companies and ranges from Rs.10 lakh to Rs.1 crore.
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| |
| Q |
What
are the tax benefits that are available if one avails of housing
loan ? |
|
A |
Tax
benefits are available on both the principal and interest
components of the loan as per the income tax act. The upper
limit of the amount of deduction of interest repayment allowed
from your gross total income is now Rs. 75,000 p.a.. Besides,
Sec. 88 offers you tax benefits for principal repayments.
The principal repayment amount included in the overall limit
of Rs 60,000 offered by this section is Rs 10,000.
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|
| |
| Q |
What
is reducing balance ? |
|
A |
Reducing
balance is the method of reducing the principal amount already
paid, from the outstanding loan amount. Every time you make
a payment,you pay interest on that part of the original principal
sum that has remained un-repaid till then.
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|
| |
| Q |
Which
loan is cheaper the monthly reducing balance or the annual
reducing balance ? |
|
A |
The
best way is to compare the EMIs and the tenures of the two
home loans. The loan carrying the lower EMI for the same tenure
is the cheaper option.
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|
| |
| Q |
What
is a fixed rate home loan ? |
|
A |
A
fixed rate home loan, is a loan where the interest rate is
constant over the entire tenure of the loan tenure.
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|
| |
| Q |
What
is a floating interest rate ? |
|
A |
A
floating interest rate loan, is a loan where the interest
rate payable is linked to the market rate like the bank lending
rate. As the bank rate varies, the interest rate payable by
you will also rise and fall. Hence you will have to bear the
risk of interest rate fluctuations, the floating interest
rates offered are slightly lower than the fixed interest rates.
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|
| |
| Q |
What
is a home Extension Loan ? |
|
A |
A
home extension loan is a loan which helps you to meet the
expenses of any alteration like extension/expansion or modification
of your home. You can avail of a home extension loan, after
obtaining the requisite approvals from the municipal corporation.
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| |
| Q |
What
is home Improvement Loan ? |
|
A |
A
home improvement loan is one that is made available for you
to do certain external work like structural repairs, waterproofing
or internal work like tiling and flooring, plumbing, electrical
work, painting, etc. |
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