Benefits of Applying Online
When Banks Compete, you win.
Apply for a Home Loan at ApnaPaisa and we will match your requirements with the best offers from our network of over 400 service providers. We will get a maximum of five providers to compete for your business. WHEN BANKS COMPETE YOU WIN. You can then decide which home loan is best for you based on:
- Lowest Interest Rate
- Lowest EMI
- No Pre-payment charges
- Lowest Processing Fees
- Maximum Eligible Loan Amount
- Mandatory Documents Required
- Lowest Processing Fees
Or any other factor that is important to you.
Negotiating Tips
1) If you have a good credit record and your income is sufficient to justify the loan you can negotiate on interest rates. You can also try and get Processing fees or legal or valuation fees reduced or completely waived.
2) If you go for a floating rate loan then pre-payment charges are not payable.
3) When interest rates are high and are expected to go down you should go in for a floating rate loan as it makes no sense to lock into high fixed rates or the so called Dual rate loans where rates remain fixed for a couple of years before shifting to regular floating rate loans. Please review this decision at least once every 6 months
4) Take term insurance and critical illness and accidental disability policy for the full loan amount to make sure you or your loved ones don't have to worry about loan repayment should you die or are disabled due to a critical illness or accident. You cannot be forced to buy this policy from the insurance company chosen by the lender - you should choose your own insurer.
Tax deduction benefits on pre-closure charges paid to the lender
There are no tax deduction benefits for pre-closure charges paid under Section 8oC, but under Section 2 (28A)Apnaloan.com Research Bureau
10 Aug 2007
I recently transferred my loan from one bank to another to take advantage of the lower rates offered by the new lender. Will this, in any way, affect the tax benefits available on the loan repayments? I have paid pre closure charges to the bank. Are any tax benefits available on such pre- closure charges?
In the case of self occupied property, Section 24 clearly provides that where the "new loan" is taken to payoff an existing loan-that was taken to acquire/construct the property, then the deduction of interest will continue to be available on such loans. If the property is not self occupied, an old circular of the I-T department should come in handy for you to claim the benefit.
As no such specific provision exists in Section 80C-regarding the availability of deduction with reference to the principal repayment to the new lender, the deduction is technically not available for the repayment of principal to the new lender although- in practice it is allowed. Pre-closure charges can be said to be "other charge (payable) in respect of the moneys borrowed" and hence will be treated as interest as defined in Section 2(28A) and can be claimed as a deduction accordingly.
However, if you use your funds to pay off the existing lender, and then take a loan from the new lender, tax benefits will not be available. You will not be able to claim the tax benefits on the repayment of the new loan because the new loan cannot be said to have been taken to payoff an existing loan.
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