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7 Steps to Negotiate the Best Car Loan Deal

Negotiating a car loan is not that simple as the dealers tend to price in manufacturers and financiers’ discount into the interest rate. Here is a step by step process to negotiate the best car loan deal.

For most Indians, buying a car is a dream that comes second only to the dream of owning a house. This dream has become real for many Indians with the arrival of easy financing for car purchase.

The decision to buy a car is, very often, prodded by the promise of easy financing that car dealers advertise. “Do not compromise, you can now own a Toyota Corolla for as little as Rs 10,000/ month” says an advertisement, egging on all with monthly spare money of Rs 10,000 to own the dream Toyota. The mathematics of this foxes the prospective buyer. Is it real?

You decide to check with the dealer. You find the offer is real, but the initial lump sum payment would be large. OK, you say to yourself. I’ll manage that. But what is the interest rate for the loan? The dealer tells you it is 11% and you wonder, how come it is cheaper than a home loan? You prod further and discover that this is really in lieu of the cash discount you could otherwise have got. You are no longer sure whether to believe him or not.

You are not to blame. Car finance can become complex because of the financing deal between the car dealer and the bank.

It will help you negotiate better if you follow the process below:

1) Finalise your decision on the car you want to buy. The interest rates vary from car to car; so, what is available on one car may not be available on another car.

2) Fix the amount of vehicle loan you need. Suppose the car costs Rs 8 lakh on the road and if you are ready to make a down payment of Rs 2 lakh, then freeze your loan requirements at Rs 6 lakh. Interest rates that you get also depend on the loan amount.

3) Ask around for preliminary quotes for the given loan amount for the given car. Freeze on the lowest EMIs that are offered.

4) Now, negotiate on the processing fees. Most times, the processing fees can be waived.

5) Then, start negotiating for cash discounts that can be adjusted against your down payment. The DSAs/dealers will offer to reduce the EMIs, but resist the temptation and insist on a cash discount. Also, the dealer/DSA will offer accessories in lieu of cash discount; again, resist and insist on cash discount.

6) Once you find that the cash discount limit has been reached, you can try for a small freebie on car accessories such as car mats, boot mats etc.

7) Remember to claim your no-claim bonus on the insurance policy for the new car if you have a claim-free record on your existing old car.

Happy driving!

Personal Loan

Need 10 Lakhs Loan at Lowest Interest Rates?

Get Rs. 10 Lakhs loan for wedding, travel, medial emergencies, business purpose or debt consolidation.

Personal loan interest rates for a loan of Rs. 10 Lakh and above starts at 10.99% to 24% Annually.

Banks & NBCF’s such as SBI, HDFC, ICICI, RBL, Kotak Bank, Bajaj Finserv, Tata Capital, Fullerton, LendingKart, etc. offer personal loan of Rs. 10 Lakhs & Above for salaried as well as self employed individuals.

10 Lakh loan can be avail in metro and non-metro cities such as Mumbai, Delhi, Bangalore, Kolkata, Pune, Noida, Chennai, Thane, Navi Mumbai, Gurgaon, etc.

Apply for personal loan on Apnapaisa.com to know your maximum eligibility from top banks in India.

Loan Amount Interest Rate No. of Tenure / Repayment EMI Per Month
10 Lakhs Loan 10.99% 60 months / 5 years Rs. 21,737/-
10 Lakhs Loan 13.00% 60 months / 5 years Rs. 22,753/-
10 Lakhs Loan 14.00% 60 months / 5 years Rs. 23,268/-
10 Lakhs Loan 15.00% 60 months / 5 years Rs. 23,790/-
10 Lakhs Loan 16.00% 60 months / 5 years Rs. 24,318/-
10 Lakhs Loan 17.00% 60 months / 5 years Rs. 24,853/-
10 Lakhs Loan 18.00% 60 months / 5 years Rs. 25,393/-
10 Lakhs Loan 19.00% 60 months / 5 years Rs. 25,941/-
10 Lakhs Loan 20.00% 60 months / 5 years Rs. 26,494/-
10 Lakhs Loan 21.00% 60 months / 5 years Rs. 27,053/-
10 Lakhs Loan 22.00% 60 months / 5 years Rs. 27,619/-
10 Lakhs Loan 23.00% 60 months / 5 years Rs. 28,190/-
10 Lakhs Loan 24.00% 60 months / 5 years Rs. 28,768/-
Home Loan

Interest claim on Home Loans

For those tax payers who want to realize their dream of owning a house, the Income Tax Act has a provision which allows them to claim interest on loans taken for a house. The deduction is available for the loan taken not only for the purchase or construction of a house, but also for loans taken for the purpose of repairs and renovation of the house.
This article will discuss various provisions in respect of allow-ability of interest under income tax Act and conditions to be met for this purpose.
Number of properties eligible for this deduction:
There is no restriction with regard to the number of properties for which you can claim the interest. For the said purpose, the properties are classified into two categories -Self-occupied and  the Let out.

However in case you own more than one house, and these  houses are either  being used for self-occupancy or by your parents or any other relative from which  you do not receive any monetary compensation, you have to opt one of these houses as self occupied and treat others as self occupied. One  property can be treated as used for your own residence, whereas for other  properties, you have to offer notional rent for tax. In case of self-occupied property, the taxable value, known as annual value, is taken as  nil. In respect of all other properties, the actual rent received or expected to be received is taken as annual value of the property.
Limits up to which the interest claim is allowable:
In respect of the self occupied property, there is an overall limit of Rs.30,000  for which you can claim the deduction. However this deduction goes up to Rs.1,50,000 in case the amount has been borrowed after 1st April, 1999. However for claiming deduction of Rs.1,50,000 you have to satisfy two additional conditions. Firstly, the construction of the property should be completed or possession of the property should be taken within three years from the end of the year in which such money is borrowed.
Secondly, you have to obtain certificates from the lender specifying the amount of interest payable on such loan along with the fact that the money has been borrowed for the housing purpose. These certificates need to be produced before the assessing office in case your Return of Income is selected for detailed scrutiny, as presently you are not allowed to attach any document with the Return of Income.
There  is no upper limit on the amount of interest which you can claim in respect of the let out  property or the property which has been treated as let out. In case of let out properties, you do not even have to produce the certificate of interest from lender also. However you will have to provide the evidence that the interest is in respect of the money which has been used for the purpose of buying, constructing or repairs etc. of the property. Even interest paid in respect of personal loans taken for making down payments or for repairs of the property can also be claimed without certificate from the lender.

When can you start claiming deduction:
Though you are entitled to claim deduction in respect of,home loan,taken for the purpose of constructing your own house or for the purpose of booking an under construction house, the actual deduction cannot be claimed till you take the possession. It can only start  from the financial year in which the construction of the house property is completed and possession is taken. However aggregate interest paid on the money borrowed while the property was being constructed will be allowed in five equal installments. First such installment can be claimed from the year in which the construction of the property is completed or the possession is taken.
Requirement with regard to holding period:
In respect of claims made towards,housing loan,repayment to specified institutions, you are required to hold the property for a period of five years from the end of the financial year in which you had taken the possession, failing which all the benefits allowed to you earlier under Section 80 C will be subject to taxation in the year of sale. However, there is no such requirement of minimum holding period in respect of interest allowance, failing which benefits allowed earlier will be reversed. However in case of interest paid for under construction property to claim the full interest, you have to retain the property for five years. Otherwise you will lose your claim for rest of the years.

Other points to be considered:
You may not be  aware that you can claim the interest payable in respect of any money borrowed for the purpose of repaying the first loan taken for the purpose of construction, purchase or repair of your house. Thus interest paid on the second loan to repay the first loan is also allowable as deduction under income tax act.
There is a  perception among  general public  that for claiming interest deduction, the home loan should be taken from banks or specified financial institutions. In reality this is not so. You can borrow the money from anybody including your relatives and claim the benefits of interest claim against your house property income.
Besides above stated purposes,  you can claim even if  you  have actually not paid the interest but it has only  been due.
I hope it is clear  that the provision of deduction of interest from income is a great relief to the tax payers as it helps them in reducing the tax liability, at the same time helps them in creating an asset.

 

Need 5 Lakhs Loan at Lowest Interest Rates?

Get Rs. 5 Lakh loan for marriage, travel, medial emergencies, business purpose or debt consolidation.

Personal loan interest rates for a loan of Rs. 5 Lakh and above starts at 10.99% to 24% Annually.

Banks & NBCF’s such as SBI, HDFC, ICICI, RBL, Kotak Bank, Bajaj Finserv, Tata Capital, Fullerton, LendingKart, etc. offer personal loan of Rs. 5 Lakh & Above for salaried as well as self employed individuals.

A personal loan of 5 Lakh plus can be avail in metro and non-metro cities such as Mumbai, Delhi, Bangalore, Kolkata, Pune, Noida, Chennai, Thane, Navi Mumbai, Gurgaon, etc.

Apply for personal loan on Apnapaisa.com to know your maximum eligibility from top 40 banks in India.

Loan Amount Interest Rate No. of Tenure / Repayment EMI Per Month
5 Lakhs Loan 10.99% 60 months / 5 years Rs. 10,869/-
5 Lakhs Loan 13.00% 60 months / 5 years Rs. 11,377/-
5 Lakhs Loan 14.00% 60 months / 5 years Rs. 11,634/-
5 Lakhs Loan 15.00% 60 months / 5 years Rs. 11,895/-
5 Lakhs Loan 16.00% 60 months / 5 years Rs. 12,159/-
5 Lakhs Loan 17.00% 60 months / 5 years Rs. 12,426/-
5 Lakhs Loan 18.00% 60 months / 5 years Rs. 12,697/-
5 Lakhs Loan 19.00% 60 months / 5 years Rs. 12,970/-
5 Lakhs Loan 20.00% 60 months / 5 years Rs. 13,247/-
5 Lakhs Loan 21.00% 60 months / 5 years Rs. 13,527/-
5 Lakhs Loan 22.00% 60 months / 5 years Rs. 13,809/-
5 Lakhs Loan 23.00% 60 months / 5 years Rs. 14,095/-
5 Lakhs Loan 24.00% 60 months / 5 years Rs. 14,384/-

 

Education Loans Put Your Money Where Your Mouth Is

The education ministry headed by Mr. Kapil Sibal (actually the ministry is called Human Resources Development but the most important thing it looks after is education) is in the limelight following the realization that higher education and vocational training are the best poverty alleviation tools in the long run.
Lot has already been written about what needs to be done in the higher and vocational education sector. There are plenty of valid suggestions on how to energize this sector by increasing capacity, improving quality, making it more accessible and removing it from the clutches of the government bureaucracy and bringing in the private sector.

One important element of reform in this sector will necessarily be in the area of education,loans,.
We have already seen the difference that easier availability of loans can make in the housing and consumer durables sector. Education can be another sector that can benefit tremendously by easier availability of education loans.

Today education loans in India lack any institutional backing and suffer from the disease of good intentions. Let me explain.

At the best of times education loans are a risky business for the banks in any country. The typical higher education or vocation education student will take around 2-5 years to complete his education. He will need a fairly large loan,to complete his education. Most likely he will not have any collateral security to offer for the education loan. In most cases his parents (or other close relatives) may be willing to stand guarantee for the due repayment of the loan but their own income may not be sufficient to repay the loan in case the student is unable to complete the course for any reason or is unable to find a job after he completes the course. In fact in a majority of cases the student’s family is not even in a position to pay the interest on the loan during the time when he is undergoing the course. They require that the interest amount also be accumulated and the repayment (of both principal and interest) begins only after the course is over and the student gets the job.,So in summary the bank is expected to lend money to a borrower without any collateral security and without sufficient current income to pay back the loan solely on the hope that the student will acquire skills good enough to get a job that will pay him enough to enable him to pay back the loan,. So
left to themselves the banks are not going to disburse significant amount of education loans except to the well heeled who can provide collateral/guarantee.

In most countries government funded specialized institutions (such as the older version of Sallie Mae in the US or the FFSAP – Federally Funded Student Aid Program) step in to ensure that loans are available for all students who are good enough to get into any accredited educational institutions that provides higher or vocational education. The loans are,not cheap,but the important thing is that they are available in spite of the credit issues surrounding education loans.

The institution normally does not lend directly but provides back to back refinance (provide loans to lenders to enable them to on-lend to students) and share in the risk (write off part of such loans if the student defaults and is unable to repay) to make sure that this vital tool to make higher education accessible to everybody (and not just the middle and rich classes as is the case in India). Contrast this with what happens in India.,The total,incremental,education loan disbursements made by the entire banking sector for last year waS around Rs. 8,500 crores which is quite negligible considering the bank’s total deposit base.,Compare,this with the estimated home loan disbursements in excess  of Rs.1,00,000 crores for the same period and the contrast is very clear.

So what is the reason for this dismal state of affairs? It is the attitude of the government that talk can substitute for action. The finance minister had promised to set up an Education Re-finance Corporation from part of the education cess that all of us pay. That promise is languishing in the bureaucratic by lanes of Delhi for the last 3 years. Meanwhile the policy makers hope that good intentions and strong words will somehow produce results.

Education loans are a part of the priority sector but have no separate allocation. Also education loans cannot be priced higher than 1% above the particular bank’s PLR. Thus banks like to do the other kind of priority sector loans (loans to small transport operators, professionals etc.), which they consider less risky.
In fact, the private sector banks and foreign banks who cannot be bullied by the government, have completely kept away from the sector (some of them have education loan programs but they all require collateral and/or guarantee from a well earning relative and interest servicing during the course period which effectively means that they service only the well heeled sections of the society). The public sector banks on the other hand are forced to show some disbursements under this head, do the minimum that they can get away with without offending the government.

They naturally have restrictive rules on the type of courses as well requirement of collateral/income based guarantee for loans above Rs. 4 lacs. All this means that there will be restricted finance available for potential students even as the education sector itself is becoming diversified and more vibrant.

In the current budget announced on July 6, 2009 the finance minister, in a clever play of words, has promised to subsidise  the entire interest expenses incurred during the course period  of students from the economically weaker sections who somehow manage to get the loan sanctioned from banks. He has said that about 5 lac students are expected to benefit from this scheme. This looks more like a statement aimed at the galleries rather than actually getting some results on the ground. It is very doubtful that the PSU banks in India will give loans to so many students belonging to economically weaker section of society.

In fact if a poor student was bright enough to get admission in say Harvard but did not qualify for student aid from the university, perish the thought that a education loan will enable him to do the course. He will probably have to do the rounds of the charitable institutions for grants/aid or probably some politician will take up his cause after the story is played up in the media.
If he is not willing to do that he will probably loose the chance of completely remaking his (and the country’s) future.

Finance Minister routinely exhort the public sector banks to lend more towards education loans. It is no surprise that public sector equally routinely ignore this exhortation after paying lip service to education loans by releasing a few prominent advertisements in the media.

Then hon’ble education minister must ensure that the government puts its money where its mouth is and creates the state funded institution that was promised long ago. After that more education loans will actually get disbursed .

To that day  Amen

SBI Declares War : Wants To Capture Pole Position In Home Loan Mart

The home loan war seems to be hotting up. The private sector players (HDFC, ICICI, Axis, LIC housing Finance) are all providing,loans,at around 9.25% floating to their new consumers (including to existing borrowers of other banks wishing to shift their loans). For once the PSU banks seem to be using attractive structured offerings to provide stiff competition to the private lenders.

Suddenly the PSU banks are raining offers on the home,loan,consumers (including long suffering existing consumers of other banks). The Canara bank offer of completely fixed rates for the next 5 years was quite popular and SBI has also come out with a good offer.

For Home Loans upto Rs. 30 lacs the details are as under:
8% fixed for 1st year , 9% fixed for 2nd and 3rd year and the consumer can decide today between a floating rate thereafter at 2% below SBAR prevalent at that time (current SBAR is 11.75% so if SBAR remains the same the rate will be 9.75% after 3 years but actual rate will be known only at that time) or a fixed rate after 3 years for the 4th and 5th year at 1% below SBAR prevalent at that time (so if SBAR remains constant for 3 years then the fixed rate after 3 years will be 10.75% but actual fixed rate for 4th and 5th year will be known only then) . There are no processing charges and no pre-payment charge if the pre-payment is made from your own sources.

Sources within HDFC have correctly pointed out that if you take the average rate (assuming that the rate from 4th year onwards will be 9.75% floating) then it works out to9.35% for SBI versus 9.25% for them.
However given the uncertainty surrounding interest rates and more importantly the tendency of all lenders (contrary to popular opinion the PSU banks also have a similar behaviour pattern) not to pass on the benefit of reduction in interest rates to their existing floating rate customers, it is always safe to go for fixed rates as long as they are economically priced and even if only for a few years.

It is here that the SBI plan scores over the other lenders who lend only on floating rate basis. Personally I would still rate the Canara Bank scheme higher than SBI as it provides for a fixed rate for 5 years with other charges that are the same as SBI.

The mighty sales machinery of SBI is already in full flow and their local level managers seem keen to do business for once. Let us see how the consumers re-act to this new scheme. Afterall the consumer is supreme.

Cheap Realty Not Reality

While much is being reported in the media about the significant dip in property prices, in actual practice most large developers are still holding on to their prices.
Though off course, they are trying to boost sales by throwing in freebies such as free stamp duty and registration, free parking, no charge for floor rise, etc.

Coming to home loan rates banks are decreasing their interest rates on,home loans,and property prices are reportedly softening.
But will it be effective in raising consumer demand?
Does that mean that it will be easier to get loans ?
Will banks give loans willingly?
Will consumers come forward to take more home loans?
The questions remain

The fact remains that to a large extent, the lending and borrowing scenario has not brightened in spite of banks reducing the,loan,rates and some news of dipping real estate prices. Of course existing,home loan,consumers are happy that their inflated EMI burden will reduce somewhat.

However it seems these boosters are not sufficient to lift the spirits of Indian consumers who are grappling with financial insecurities. The overall economic slowdown, global news reported by the media, job loss, job insecurity, uncertain future of businesses/enterprises, volatility in the stock markets are a few reasons that may keep potential borrowers from investing in residential property (and therefore taking any home loans). Moreover additional taxes on real estate such as the 5 per cent value added tax (VAT) and 4.5 per cent service tax are obstacles in the way of boosting demand, be it for property or property loans. These costs have to be borne by the buyer.

To add to the number of speed-breakers in the way of these two inter-dependent sectors, there are the tightening eligibility norms. Lenders have made their norms more stringent. They have raised the margin required for a home loan because property prices could go down further.
The real up tick in demand will come when the consumer feels confident about taking on long term liabilities. We should watch for the Consumer Confidence Index (CCI) figures, which have been slipping downwards almost every quarter of late.

Predictions in a volatile scenario such as the current times are difficult. Interest rates need to see a further revision southward to be able to boost the demand for home loans. Similarly, property prices should see a visible correction to encourage the demand for realty and thus home loans. But most importantly, consumer confidence needs to be boosted.
Maybe wait and watch should be the buzzword for now.

Money Matters

Money Is Not The Most Important Thing In life, But It Reasonably Close To Oxygen On The Got To Have It Scale.

Be an Investor
Use Money in Order to Make More Money follow the Cash Flow Quadrant.
There are four types of income generators in the world

1.The Employee safe and secure job.

2.The Self -Employed own their own job.

3. Business owner why to do it yourself if you can hire someone to do it for you like Tata, Birla etc.

4.investor who makes money with money.

AS SAID RICH V/S MIDDLE CLASS
Rich Earns – 30% from E or S and 70% from I,Others Earns – 80% or more from E or S and 20% or less from I

Let’s resolve in 2010 to be an INVESTOR: The Must Haves!
Health is wealth Absolute Truth; when it comes to health. Remember, for yearly executive health check up. Cover your family under Regular Mediclaim/Family Floater Plans & enjoy tax benefit u/s 80D. Sec 80D allows deduction of max limit of 15000, additional limit of 15000 for coverage of dependant parents and for senior citizen the limit is 20000.

Opt for LIC’s Health protection plus alongside and enjoy tax benefit of Rs 15,000 from 2 different files. Sec 80DD allows deduction of max amt of 50,000 or Rs 1, 00,000 for treating maintenance of severe disability for dependent family members. Sec 80DDB includes deduction of medical expenditure on treatment of prescribed ailments.

Review Liability Portfolio – when Too Much is Dangerous clear all your liabilities especially when we are not getting tax benefit out of it e.g. personal loan, car loan other than business loans and education loan so that we have complete financial independence. Sec 80E includes tax relief of interest payment on education loan for higher studies of child, spouse & self.

Home Loan – Let You Family Inherit the House Not the Home Loan; owing a house is not just a dream but a necessity and there are several tax benefits as well. We can always opt for housing loan as interest paid on home loan can be deducted up to 1.50 lacs, it can be doubled in case of joint borrowers.

Further there is no cap on deduction of interest if the house is either let out or deemed to be let out u/s 24 as this can be worked out as a good tax planning tool at the same time it creates asset for you.

Life Insurance is a plan that exalts life and defeats death; At any time human life value in society is far greater in magnitude than value of all property put together. Life insurance plans not only gives peace of mind, but also help us in securing our liabilities. Premiums paid also qualify for sec 80C & 80 CCC. The maturity proceeds are tax free u/s 10(10D)

Ready to retire rich? Chase your passion, not your pension; With stretched work hours and strenous routines, saturation level are setting in earlier for the youth today. In such a scenario, early retirement has become more a need than desire. Remember, the later you start for your destination, the faster you have to travel the later you start saving for retirement, the more you have to accelerate your rate of saving You can earn tax free monthly income per month by investing monthly from today. Retirement planning assures dignified and independent life.

Key Person Insurance; It is an old clich but a true one nevertheless, that one of the most essential elements in the success of any business is the quality of people working within it. As a business owner you are a valuable asset to the company ensuring yourself can ensure your company’s future and protect the future of your business. Cost (premium) under Key man Insurance is 100% exempt from business income u/s 37(1).

Prepare for Education and Childs Marriage through mutual funds. With higher appetite to take risk at younger age we can consider investing in mutual funds or unit linked policies with respect to short term planning. Investing amounts is SIP’s can lead to better results than having lump sum in traditional bank by taking advantage of the volatility in the market. ULIP and few mutual fund schemes are eligible for deduction u/s80C.
Note;The premium can be paid upto Rs 1,00,000/-to avail deduction u/s 80C, 80CCC. However the limit of 1 Lac can be exhausted by paying premium under any of the said section
Succession planning the key to better planning; Succession Planning combines elements of business design, ownership/management succession, wealth accumulation, retirement design, and estate planning.

For further reference we have added the factor on our website www.bharatparekh.com at InstaWILL

New Direct Tax CodeIn this budget finance minister is planning to introduce the DTC code which is believed to more simplified and easy but lets talk abt it once it comes.
Please check if you’ve taken the benefit
Sec 80C/80 CCC Investments upto Rs 1.00 Lac in Life insurance, ULIP, NSC, tax saver – bank deposits, mutual funds, post office schemes, EPF, PPF, Prin. Payment -home loans & children’s tution fees.

Sec 24 – Upto Rs 1.5 Lacs on home loan interest payments – For joint borrowers Rs 3.00 Lacs. For let out property, no limit on deduction of interest

Sec 80E Interest payments on education loan taken for higher studies.

Sec 80D – Deduction upto Rs 15,000 under mediclaim/health insurance policies. Additional Rs 15,000 for cover of dependent parents. Sr. Citizens limit is Rs 20,000

Sec 80 DDA – Upto Rs 50,000 for treating maintenance of a handicapped dependent/ Rs 1,00,000 for treating maintenance of a dependant family member with severe disability. E.g. amt deposited with LIC under Jeevan Adhar plan.

Sec 80 DDB – Deduction on medical expenditure on prescribed ailments

Sec 37(1) – Cost(premium) under Key person Insurance is 100% exempt from business income u/s 37(1)
Last but not least the Right Choice: choose your financial advisor with
Service Attitude
Thorough knowledge in his domain
Efficient team
Rich experience
Strong client base.

Your house, and Interest related tax deductions

The benefits of interest for house,loan,allowed under present income tax laws is dependent on usage of the money borrowed, here we will explore the provisions of the same in this article.
For claiming the interest benefit, first and foremost thing you should  keep in mind is that the benefit is available in respect of house owned by you which is ready for occupation. Thus you cannot claim this benefit in case either the house is not owned by you or during the period when it is under construction. However any interest paid, during the period when the construction was going on can be claimed in five equal installments beginning from the year in which the construction is completed. The benefit of interest is available on accrual basis and it is not necessary that you should have actually paid the interest by issuing a cheque.
Most people have a notion that interest on loan can only be claimed if the loan has been taken for the purpose of either buying a house or for the purpose of construction on the plot owned by you, which is not true. Even the  interest on money borrowed for the purpose of repair, renovation or reconstruction of house is also eligible for deduction. However if you have borrowed money against your property for the purpose which is not covered above, you will not get any deduction under the head Income from house property. However the same can be claimed  under other heads if the money borrowed against your property has been used in some business or for making some investments, implying a direct linkage is not established.
So what are the sources from where you can borrow besides banks, HFCs and NBFCs? Borrowing from friends and relatives too entitle you for this benefit. This way we see that for claiming the deduction, it is not the source of money which is  important, but the purpose is and you should be in position to prove the end use of the money for claiming this tax benefit. You can even claim the interest paid on personal loan taken for making down payment as the banks will not fund you more than 80% of the cost of the house.
However in case the money is borrowed on or after 1st April, 1999 for the purpose of buying the house in which you are staying, you have to obtain a certificate from the person who has lent you the money specifying the amount of interest payable on this  loan. So except for the loan taken from the period beginning from 1st April 1999 for the property occupied by you, the law does not require you to even obtain a certificate from the  lender but you will have to conclusively establish the linkage between the amount borrowed and the end usage.

Now you would like to know the quantum of deduction  available for interest which mainly depends on the usage of the property and timing of the loan.  For the properties which are let out, the entire amount of interest is allowable. In respect of  properties which are occupied by you or your relatives, implying  it is self-occupied, the normal amount of deduction available is Rs. 30,000. However you can claim an enhanced deduction of Rs. 150000 if loan has been taken for purchase or construction of a house  on or after 1st April 1999 and the purchase or construction of the property is completed within a period of three years from the end of financial year in which the  loan was  taken. For loan taken for repairs, renovation or reconstruction of the house occupied by you, the limit of deduction is still Rs. 30,000 but there  is no limit in respect of interest on loan for repairs, renovation or reconstruction of house which is let out.,In case of more than one property occupied by you or your relatives, the law allows you to choose one house as self-occupied and all the other house/s shall be treated as let out and the deduction will be available to you accordingly.

I  hope now you know fully about the interest benefits in respect of house owned by you, so if you have been depriving yourself for any such deduction till now, make the first move!