Is It Better to Buy a Home with Cash or Home Loan?

A home loan is a necessity for most homebuyers to materialize their dream of becoming a proud homeowner. But, if you are rolling in cash or financially stable to pay for the home all at once then what should you do? The relief from complicated bank work and EMI burden is the only thing that first comes to your mind. Well, had you known the benefits of taking a home loan despite possessing sufficient funds, you would like to opt for the former. Let’s take a look.

Provides Tax Deductions

Section 24 of the Income Tax Act allows a 2-lakh rupee deduction on the home loan interest, which can be claimed by the property owner provided that it is occupied by it or its family members. Even if the owner rents the property, he will be entitled to a tax deduction worth 30 per cent of the summation of rental income, paid home loan interest and municipal taxes. Thus, the tax liability gets reduced on a whole.

Section of 80C of the Income Tax Act makes room for the homeowner to claim a deduction on principal payment by1.5 lakh rupees.

Prevents Your Funds from Getting Locked

The returns on investing in Real Estate are not as high as compared to other ventures like mutual funds, bonds or stocks. If you have funds to spare then why lock them up entirely in a huge investment like that of Real Estate instead of making the most of them for the best possible and quicker returns through a diversified investment portfolio.

Makes Your Credit Score Worthy

If you already have enough capital to buy the home in cash then it would wise to opt for a home loan as you will be able to pay the loan EMIs without any delay. This in a way will enhance your credit record and make it sufficiently worthy of credit card application and loan approvals in future.

Helps Save Money for Emergencies

Investing your entire savings whether in purchasing a home or in any other venture is certainly an unwise decision since you can never predict all of your future plans, especially any crisis when you are in need of money more than anything else.

Why should you use up all your funds only to become empty-handed at the urgent need of it in future? On the other hand, home loans are available at attractive rates that make them the least expensive of the debt forms in the country.

If the reading has interested you then log onto to select from flats in North Kolkata for your dream home. Whenever you are in need of assistance while purchasing, selling or renting a property.

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