A loan, when managed well, is the biggest dream come true. And when it involves a life goal as significant as buying a Plot for sale in Chennai, a home loan can be a tool that benefits countless people. However, many among us have funds to buy a home without requiring the assistance of a loan. They often face a dilemma: should they exhaust their savings to urge a Plot for sale in Chennai and avoid debt or take a loan instead? There’s no “one-size-fits-all” answer to this.
That said, lack of funds is not the sole reason why people take a home equity credit. This financing facility comes with several benefits to lure aspiring homeowners. A home loan is one of the most cost-effective borrowing tools which comes with a low rate of interest. Unlike other loans, there’s zero prepayment penalty on home loans with floating interest rates which gives a lot of advantages for the user.
Buying a house is a long-term decision of over 10 years; the interest rates may undergo several up and down cycles. Therefore, you’ll ensure that you will enjoy falling rates at some point in the cycle.
There could even be situations during which the interest rates fall, allowing you to prepay your loan and own your home.
The best way to manage borrowing costs is by actively managing your home loans. Banks and home-loan lenders often give new borrowers much better rates. During the uptick of the speed of interest cycle, if your cost of borrowing increases by quite 2 percentage points, pay 0.5 per cent of the loan outstanding as processing fee (conversion charge) to your lender to avail the rates offered to the new borrowers.
Reduction in GST rates on a Plot for sale in Chennai
GST (Goods and Services Tax) rates on home purchase are reduced significantly. Currently, the GST rate levied on the acquisition of residential homes is 5 percent (1 percent for affordable homes) without the benefit of input tax credit (ITC). Purchasing a Plot for sale in Chennai today will offer you the advantage of these low rates.
Makes buying a home affordable for all
The home loan makes it easier for an average middle-class salaried person to afford to buy Gated community plots in Chennai of their own. The lenders in India sanction or reject the house application based on the credit score of the applicant also as their capability to repay the amount.
If you receive an income regularly and have the capacity to repay the EMIs (equated monthly instalment), the lenders will quickly approve the application. Additionally, the house loans have an extended tenure, typically it ranges from 15-20 years, which suggests the EMI is smaller and cheaper. So, by availing a loan, you’ll enjoy the happiness of being a home-owner.
When you face a liquidity crunch and are forced to take a financing facility like a loan or a collateralized loan, it’s going to cost you far more in interest compared to your home loan interest amount. So, why use your funds and live in a liquidity crunch to buy a Residential land for sale? Your funds will help you with life’s uncertainties and other important financial goals.
Due diligence of property by the bank
Banks exercise strict due diligence before financing any project, something that reduces your risk to a great extent. They verify the project-related documents, its title and legal clearances before approving a loan on it. So, once you’re taking a home loan from the bank that has already approved the project, it becomes safer than an unapproved project.