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 Implication On Pre EMI
Tax deduction benefits are available from the financial year in which the construction is completedApnaloan.com Research Bureau
10 Aug 2007
An underconstruction property was bought in August 2004 with disbursement being made in stages, till final disbursement. The possession will be provided on January 31, 2007. Pre EMI interest is being paid to the bank, currently. Is Pre-EMI interest deductible for income tax purposes? If yes, in what manner?
All interest payable in respect of the year during which the construction is completed, (including interest payable for the period during which the construction was still to be completed in that year) is deductible under Section 24. In this case, the entire interest payable from April 1, 2006 onwards, is deductible under this section; irrespective of the fact that, for 10 months in that year (that will end on March 31, 2007)-the property was under construction. All interest payable in respect of periods up to March 31, 2006, will be aggregated and allowed as a deduction in five equal installments beginning from the year in which the construction is completed.
Capital repayments, on the loan, if any, made in years in which the property remained under construction-re not eligible for any deduction. The position can be summarized as under:
Later years (year ended March 31, 2012 and later years in our example)| Period | Deduction for Interest payable |
Deduction for Capital portion repaid or stamp duty/ registration charges |
Remarks | |
| (1) | (2) | (3) | (4) | |
| 1. | Years in which construction is still to be completed (up to March 31, 2006 in our example) | No deduction is permissible | No deduction available. Any payment made on this account is lost forever | Pre-EMI Interest payable to be aggregated to be allowed as deduction in later years. Aggregate interest payable taken as (X) |
| 2. | Year in which construction is completed (year ending March 31, 2007 in our example) and 4 subsequent years (i.e. up to and including the year ending on March 31, 2011 in our example) | Interest payable for the full year (including pre-EMI interest payable for the year) plus 1/5th of (X) | Available up to the overall limit of Rs. 1,00,000 | For properties given out on rent there is no upper limit on the deduction under column (2). For self occupied properties the maximum limit is Rs. 1, 50,000 or Rs. 30,000 depending on the length of the construction period. |
| 3. | Interest payable for the full year | Available up to the overall limit of Rs. 1,00,000 | Same as (2) |
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