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Income Tax Benefit on Home Loan for Under-Construction Property

Purchasing a new home is a dream for many, but it can be tough on the pockets as real estate prices are continually increasing. That is why most people opt for home loans to enjoy a smooth process of moving into their new homes, as today, the house loan rates are highly affordable and come with additional benefits. Also, there are several income tax benefits on home loans that one can avail of, making them a popular way to finance the purchase of properties. 

Apart from income tax rebates on home loans, another way to reduce the financial burden of purchasing a house of your own is by availing of an under-construction home loan with tax benefits. Investing in an under-construction property can help you retain some cash, as there are a few tax exemptions you can apply for after acquiring the entirely constructed house. Besides, under-construction houses generally quote a lower price than constructed ones.

Here’s how you can avail of home loan tax benefits for under-construction property.

Tax deductions on under-construction property

If you purchase an under-construction property by taking a home loan, you can avail of home loan tax benefits for under-construction property.

Suppose you buy a property that is being constructed and are currently paying the EMIs for the loan. In that case, you can claim tax deductions on the principal amount (up to Rs. 1.5 lakhs) under Section 80C of the Income Tax Act, 1961.

Also, apart from deductions on the principal amount, you can also claim tax benefits on your home loan rate payments. 

Additional Read: Can I Claim Income Tax Exemption on Loan Taken for Under-Construction Property?

Tax deductions on interest paid pre-possession of the property

Taking a house loan to purchase your dream home is now more convenient than ever, as you also get exemptions for interest on housing loans under Section 24 of the Income Tax Act. Combined with tax exemptions on the principal amount, a home loan for under-construction property makes your dream house more affordable. 

Yes, you can claim deductions on the interest paid on the house loan before possession, albeit after the construction is complete and the property is ready for occupancy. If the construction is still underway or you use the loan to purchase a plot, you cannot claim any exemption for interest on a housing loan. Section 24 also puts a limit on benefits you can claim, and you can only claim an amount of up to Rs. 2,00,000 in this case.

Meanwhile, the interest you pay before possession gets accumulated. Once you claim a tax exemption on this interest, you can reclaim this amount in five installments after the construction is completed. To have an exact estimate of this amount, you can use a home loan EMI calculator online.

Additional Read: Which one is better? Under- Construction or Ready-to-Move-In House

Tax benefits on stamp duty

You can claim an income tax rebate on home loan on the amount paid towards stamp duty and registration charges under section 80C of the ITA. However, the benefit is only available after the construction has been completed and you are in possession of the property.

Additionally, if the property you are purchasing has a stamp duty under Rs. 45 lakhs, you can also avail of a tax deduction of up to Rs. 1.5 lakhs for interest paid on the loan. This provision is available to homeowners under section 80 EEA of the Income Tax Act.

Nowadays, several targeted home loan calculators are available to keep you abreast of all the rates and charges involved in a loan. Therefore, you can stay aware of the costs and choose wisely.

Income tax benefit on home loan’s interest in the pre-construction period

As you know, Section 24 of the Income Tax Act allows you tax benefits on interest paid on home loans, but only after the construction is complete. However, home buyers claim benefits on interest paid even in the pre-construction period under special circumstances.

The Section 80EEA of the Income Tax Act allows you to claim a deduction on interest paid on a housing loan up to Rs. 1,50,000 regardless of the restrictions of Section 24, given you fulfil the following conditions:

  • Your housing loan was sanctioned during the period starting between 1st April 2019 and 31st March 2022.
  • The residential house property’s stamp value does not exceed ₹45 lakh.
  • You do not own any residential house property on the date of sanction of the loan.

If you tick all the above boxes, your home loan on the under-construction property will be much more affordable. You would be eligible for income tax benefits on the home loan’s interest even before the construction is complete. 

Wrapping up

There are various income tax benefits on home loans for under-construction property. So, if you’re planning to construct a home, then make sure to check your home loan eligibility and reach out to Tata Capital for a quick loan. We offer home loans at some of the most competitive interest rates and flexible tenure.

Apart from this, you can use our home loan eligibility calculator to enhance your eligibility parameters. Visit Tata Capital website and apply for home loans online, right from your home. Enjoy a quick disbursal and hassle-free documentation process with us and move into your dream home without any delay!

How Will the 2021 Budget Impact the Auto Sector in India?

The 1st of February, 2021 was a pretty heated and hectic day for the automotive industry as the Finance Minister, Nirmala Sitharaman, announced the Union Budget 2021, its policies and initiatives. The industry had suffered a severe economic blow due to the pandemic and relied on the new budget for faster recovery.

Budget 2021: Demands placed by the auto industry

In hopes of recovering after months of low demand, the auto industry’s two significant requirements from the Budget 2021 were rationalisation of the tax structure and scrappage policy. These policies are considered to be the need of the hour because “tax on the automobile sector is very high. Currently, most cars, commercial vehicles, and two-wheelers fall in the bracket of 28%,” said Satyakam Arya, MD and CEO of Daimler India.

What the 2021 Budget offers the automobile sector?

So, has the Finance Minister introduced such measures in the Budget 2021 for auto sector that will help it recover faster from the economic crisis of 2020? Let’s find out.

#1 Perhaps the most important announcement for the industry was the voluntary vehicle scrappage policy. Union Minister of Road, Transport, and Highways, Nitin Gadkari, has confirmed that the specifics regarding this policy would be announced soon.

#2 The next announcement in this year’s Union Budgetdeals with boosting agricultural growth. However, the auto industry’s takeaway is in the form of a government-introduced cess on petrol, diesel, and other specific items. Now, does this measure mean fuel prices will go up? Hardly, since the imposition of cess is accompanied by a reduction in Basic Excise Duty (BED) and Special Additional Excise Duty (SAED).

#3 Finally, another important announcement in the Budget 2021 is that of taxes – the government has introduced a hike in taxes on specific auto components such as engines. Though this move has been taken in order to make India more self-reliant, it is unlikely to sit well with foreign OEMs such as Volvo and Mercedes-Benz who need to import some of their models.

Additional Read: Key Things to Know about the Union Budget 2021

Reactions to the new Budget policies

Reactions to the new Budget 2021 for auto sector are mixed, yet, by far, the announcements have been received well. The brand director of Volkswagen, Ashish Gupta, said, “With respect to the auto sector, increase in custom duty on certain auto parts would impact the input costs although we’re yet to assess the financial impact. On the voluntary scrappage policy, strict governance on the fitness test would determine the benefit on the environment and pollution reduction.”

The MD and CEO of Mercedes-Benz, India, Martin Schwenk, also showed his concerns regarding an increase in taxes on engine components, by further adding, “There could have been a further push towards e-mobility by lowering import duties on EV.”

Additional Read: Emerging Trends in the Second-Hand Car Market

To sum up

The new budget policies make it clear that now is the time to invest in second-hand luxury cars by applying for a used car loan. Plenty of pre-owned vehicles at top-notch condition yet lower prices are available in the market today.

Choose a reputed lender such as Tata Capital for availing second-hand car finance. We offer relaxed used car loan eligibility criteria and flexible repayment options.

You can use our online used car loan EMI calculator to determine your affordability in advance. Adjust the loan amount and tenure to arrive at a suitable EMI.

Our used car loan interest rates start at just 15%! So, get in touch with us today!

Best Second Hand Cars Ideal for Family of 4 in India

Every year there is an upsurge in the used cars market in India. Many first-time car buyers prefer this affordable option compared to a brand-new vehicle, as there is less paperwork and car depreciation involved.

Besides, there is an exhaustive range of cars available in the second-hand car market – from Sedans to hatchbacks. If you are looking for the best used cars for family, read on to find some great options in this article.

Maruti Suzuki Wagon R

One of the most popular cars among families is the Maruti Suzuki Wagon R. With a spacious passenger cabin and large headroom, this car is the epitome of comfort. Wagon R is a popular hatchback option priced reasonably in the second-hand car market. 

It is known for its excellent mileage, a low turning radius and low maintenance cost. If you don’t wish to buy this utility vehicle using your savings, avail of a used car loan to finance your purchase.

Maruti Suzuki Swift

Since its launch, Suzuki Swift has worn the crown for being the favourite of most car buyers in the second-hand market. The car is affordable and provides multiple features that make it an excellent choice within its price range. This hatchback is equally famous among individual drivers and families and can be easily bought at an attractive used car loan interest rate.

Additional Read: 4 things to keep in mind before you buy a second-hand car on loan

Honda City

With a combination of style and reliability, the Honda City is an ever-green sedan option for countless Indians. This vehicle has been one of thetop used cars for families of 4in the country for several years. Like most sedans, it is spacious and comfortable and offers luxury along with fuel efficiency and power.

Maruti Suzuki Alto

If you are looking for an incredibly affordable and comfortable vehicle, the Maruti Suzuki Alto might be the car for you and your family. This vehicle offers low fuel consumption and smooth ride quality, making it a popular choice in the used car market.

Maruti Suzuki Swift Dzire

Swift Dzire is easily the most impressive sedan you can find. The low maintenance, large boot space and high fuel efficiency are some of the attractive features offered by this stunning car. What’s more, you can even find spare parts for this vehicle easily across India.

Additional Read: Best Cars for Middle-Class Family in India

The smartest way to finance a used car

Looking for financial assistance to buy a second-hand vehicle? If so, turn to Tata Capital. We offer used-car finance with a host of benefits, such as:

  • Affordable interest rates
  • Flexible repayment terms
  • Relaxed used car loan eligibility criteria
  • Speedy online or offline processing
  • Minimal documentation

So, don’t wait any longer! Visit our website to use our used car loan EMI calculator and apply for a loan today!

Know about the Processing Fee and Other Charges for Bike Loan

Riding a bike symbolises control, puts your mind at ease, and gets you out of traffic jams. No wonder why, this mode of transportation has become exceedingly popular for intra-city movement and long-distance thrill rides.

What’s more, with easy availability of bike loans at affordable interest rates, several enthusiasts are able to afford their dream motorcycle without hurting their budget. If you’re looking for the same, you must know about the two-wheeler loan processing fee and other charges as you begin your loan application.

Let us discuss the important loan charges to help you buy the bike you desire.

Bike loan processing fee

When you apply for two-wheeler finance, a lender may require you to pay an additional fee to process your loan. This is a one-time processing fee, which is non-refundable. A potential borrower must pay this charge at the time of filing their application for the two-wheeler loan. Let us look at some components that make up the processing fees.

Administrative fee

This is to cover the administrative expenses that are incurred while processing and sanctioning your loan. Some lenders may even charge this as a separate charge.

Post-disbursement documentation charge

This fee is to cover the charges related to the post-disbursement documents like the disbursement letter, disbursement agreement, collateral documents, etc.

Other charges for bike finance

Apart from the processing fee, bike finance entails miscellaneous charges such as:

Bounce charges-

If a cheque bounces due to technical reasons or insufficient funds in your account, the lender can charge you a penalty.

Cancellation charges

When you request to cancel the loan for some reason after the loan approval or disbursal, the lender may charge you for the cancellation.

Stamp Duty charges

This is to cover the stamp duty expenses that are incurred during the two-wheeler loan registration.

Foreclosure Charges

When you wish to repay the loan before the loan tenure is over, your lender might ask for a foreclosure charge.

Repossession Charges

If the lender takes the vehicle through repossession, they might penalise you. This will occur if you fail to make the loan repayments.

These charges could be a percentage of the loan amount or a standard amount, depending on the lender. GST is applicable on some of these charges too.

Other aspects of a bike loan to consider

Loan charges need to be considered carefully before choosing a bike loan. There are also other elements to factor in while selecting a bike loan that best fits your requirements:

Loan amount

Most financial institutions cover 100% of your bike’s value. Based on your capacity to put forward a down payment, you can even opt for a zero-down payment loan.

Two-wheeler loan interest rate

Some lenders can offer you a lower rate than the market’s rate if you have a good credit history.

Tenure

Your tenure can also influence your interest rate. A longer tenure means a lower two-wheeler loan interest rate but it could also mean paying more in total over the entire tenure.

Flexible EMI payment

Most lenders offer some flexibility in EMI payment. Check with your lender if you can choose a flexible EMI scheme that suits your financial situation better.

Eligibility criteria for a bike loan

Before applying for bike finance, check your two-wheeler loan eligibility criteria online.

To be eligible for a motorcycle loan, you must maintain a decent CIBIL score (preferably 750 and above) and have a stable job for at least one year. Self-employed individuals can apply for a loan too by providing proof of stable employment for at least a year.

The minimum age of the loan applicant should be at least 21 years, and the maximum age limit is usually between 60 to 65 years, depending upon the lender. Also, it is preferable if you prove residence in the same home for at least one year to show a stable residential status.

Additional Read:  How to get a Two Wheeler Loan? 4 Tips to Follow

Documents required for bike finance

After meeting the primary criteria to avail a two-wheeler loan, you need to submit a list of documents to the lender. Your loan will be processed based on the verification and approval of the following documents-

  • Identification proof- Aadhar Card/Driver’s License/Pan Card/Passport/Voter’s ID
  • Address Proof- Passport/Electricity Bill/Ration Card
  • Last 3 months bank statements (mandatory)
  • Income Proof (if required)

Based on your profile and documents’ approval, you can successfully avail of bike finance at attractive bike loan interest rates.

Additional Read: Things to Know While Comparing Two-Wheeler Loans

To sum up

All set to add a brand-new bike to your garage? Apply for a motorcycle loan at Tata Capital at competitive two-wheeler loan interest rates.

Not sure about the kind of EMI you will pay if you take a loan from us? Don’t fret! Simply log on to our website to use our bike loan EMI calculatoto accurately evaluate your monthly instalments. So, make a smart financial move by applying for a two-wheeler loan with us today!

What Are the Things Home Buyers Should Expect from Budget 2021?

Every year before the union budget is presented, prospective home buyers and real estate players anticipate reforms and rebate. This year, the expectations were exceedingly high for to-be homeowners who were awaiting some respite after a pandemic-struck 2020. With India’s budget 2021 on the floor, a slew of measures graced home buyers and the realty sector.

From income tax relief to affordable housing initiatives, here are the things that will impact your goal of renting or buying a house in 2021:

Tax deduction

If you are looking to purchase a house in 2021, you will be able to avail an extra income tax deduction of Rs 1.5 lakhs. In the budget, the government has extended the provision by another year to 2021-2022. Your property investment will bear you a yearly tax-deductible investment of Rs 3.5 lakhs, owing to this amendment.

The deduction announced first in the July 2019 budget, is applicable on home finance for affordable housing. Properties worth less than Rs 45 lakh belong to the affordable housing category.

A surge in demand and loan benefits

Realty consultants and real estate developers suggest that tax exemption (up to Rs. 3.5 lakhs) on affordable housing projects will significantly boost demand for residential dwelling units in a post-pandemic market.

Tax holiday period and affordable housing prices

The central government has provisioned a tax holiday, i.e., tax reduction or elimination by another year, for affordable housing realty developers in budget 2021. For homebuyers, this is good news too, as the builders will now be able to finish their projects faster.

Custom duty on iron and steel

If you wonder how relaxed custom duty on metals like steel and iron aid your home purchase, think again. The lowered duty will extensively trim down the expenditure developers may incur on imported material used in construction. With real estate builders benefitting from the move, the home prices will also reduce quickly. 

To sum up

The tax deduction, loan benefits, and affordable housing incentives are a substantial relief for the real-estate sector, which was significantly impacted by the pandemic. The advantages are also aplenty for homebuyers who can purchase their dream home without drilling a hole in their pocket or denting their savings.

So, if you are scouting the market for a housing loan provider that offers one of the best home loan interest rates, your search ends at Tata Capital. Avail the best home loan offerings at flexible repayment terms and minimal documentation from us.

Further, once you have a clear-cut idea of the total home buying expenditures you can afford, use an online home loan EMI calculator to navigate your future monthly instalments with us.

Connect with Tata Capital today, and let your transition to a new home be a smooth one.

Long Term Personal Loans Pros and Cons

Let’s face it! Your monthly income may not cover every big-ticket purchase or unforeseen expense that comes your way. In such cases, it is best to apply for long-term personal loan.

Personal finance can be a true savior during a financial crisis. This loan type provides funds to cover a diverse set of expenses like medical emergencies, weddings, home renovations, or educational opportunities. But, before you apply for a long-term personal loan, you must be aware of its pros and cons.

Here are some of the prominent advantages and disadvantages of long-term personal finance.

Pros

  • One of the most significant advantages of long-term personal finance is that you don’t have to pledge collateral to avail it. Simply put, as an applicant, you can get the loan for your big-ticket purchase without committing your home or car as a lender guarantee.
  • Another notable benefit of long-term loans for personal reasons is that they are versatile in nature. Capital from long-term personal finance can be used for a vacation, a wedding reception, medical emergencies or any other expense.
  • Personal loan interest rates are relatively affordable, given you don’t have to pledge a collateral. This makes it one of the wisest picks for unsecured financial assistance.
  • Finally, you can also apply for personal finance if your credit score is not too high.

Additional Read: How to Choose the Best Personal Loan for Needs?

Cons

  • As compared to secured loans (where you have to pledge a guarantee), unsecured personal finance may have a slightly higher interest rate.
  • Much like various other loans, personal finance also comes with late payment penalties. This clause essentially demands you to be more vigilant with the timeline of every EMI payment.
  • Sure, personal finance is a great option for you if you have a low credit score. But, the lower your credit score, the higher the interest rate you may pay on your loan.

Additional Read: Difference between Short and Long-term Personal Loans

Final thoughts

As you can see, the pros of personal finance clearly outweigh its cons.

Are you looking to avail of personal finance but are unsure if you are eligible to apply? If so, then go through the relaxed personal loan eligibility criteria online on the Tata Capital website and apply with us.

We offer personal loans at attractive interest rates, with flexible repayment norms, online application and minimal paperwork. We also advise you to use our online personal loan EMI calculator as that will help evaluate your potential monthly installments with us.

So, what are you waiting for? Rely on India’s leading lending institution, Tata Capital and avail of personal finance. Allow us to help you fulfill all your big-ticket expenditures.

To know more, log on to our website or give us a call today! 

Personal Loan Top Up


If you already have a personal loan and find yourself needing extra funds, a personal loan top-up could be the ideal solution. This additional loan is specifically for those who are currently paying off an existing personal loan. It’s a hassle-free way to obtain extra money during your loan repayment period.

Just like a standard personal loan, the top-up loan requires no collateral and you can use the extra cash for any type of expense.

Features and Benefits of Personal Loan Top Up

  1. Quick Access to Additional Funds: Personal Loan Top Up offers fast and easy access to extra cash when needed.
  2. Hassle-Free Application: Simple online application process for existing loan borrowers.
  3. No Collateral Required: Borrow additional funds without the need for new collateral.
  4. Flexible Usage: Use the top-up loan for any personal expenses, from home renovation to travel.
  5. Competitive Interest Rates: Often comes with attractive interest rates, making it a cost-effective option.
  6. Minimal Documentation: Requires less paperwork, as your lender already has your details.
  7. Improves Credit Score: Timely repayment can enhance your creditworthiness.

Eligibility Criteria for Personal Loan Top-Up

The first step is to fulfill the top-up on personal loan eligibility criteria

– You must have an existing loan with the lender.
– Lenders can only give you a top-up after you’ve repaid a certain portion of the outstanding loan.
– stable income is a must as it instills confidence in the lender about your repayment capability.
– A healthy CIBIL score is critical as it proves your creditworthiness.
– A proper track record of timely EMI payments is a must.

Additional Read: Difference between Top-Up Loan and Personal Loan

Documents Required for Personal Loan Top Up

Following are some common documents that lenders ask for –

– Address proof such as your passport, utility bills, rent agreement paperwork, etc.
– Identity proof such as your PAN card, Aadhar card, Voter ID, passport, driving license, etc.
– Income proof
– Passport-size photographs
– Last three month’s salary statements, for salaried applicants

How to apply for Personal Loan Top Up

There are two ways of receiving a top-up on your loan. The first one is where you can apply for the same with your current lender. Provided, they offer personal finance top-ups, and you have already repaid a portion of the pre-existing loan through regular EMIs. After meeting all eligibility requirements, you can visit your lender’s nearest branch or check their website and fill out an online or offline application form.

In the second option, you can opt for a ‘balance transfer’. In this scenario, you will be shifting your current financing to another lender and then applying for a top-up on the active loan. You can also choose this method when other lenders offer better personal loan interest rates or longer repayment durations.

Further, before applying for a top-up, experts recommend you use an online personal loan EMI calculator, to accurately calculate the modified EMI you’ll pay. Do this by filling out the revised loan terms, such as – amount, tenure, and interest rate into the calculator.

Additional Read: Tips to Better Manage your Personal & Top-Up Loans

Conclusion

If you’re actively searching for lenders offering attractive top-ups, come to Tata Capital. Choose our personal loan for self-employed and salaried individuals for flexible financing terms, straightforward documentation procedures, and competitive interest rates.

Visit our website today and learn all about our top-up options!

How Can a Personal Loan Help Save Tax in 2023?

Personal loans are a great medium to finance a wide array of expenditures – ranging from higher education to grand wedding celebrations. Simply put, such loans are easily accessible, can be used for multiple purposes, and demand no collateral.

But is that all? No! They also help you save tax. Here’s how.

Tax benefits on personal finance: A closer look

Normally, if you avail personal finance, you will not be considered under the purview of taxation, the simple reason being that the said loan is not counted as income.

However, ensure that you avail personal finance from a reputed lender or the loan will be considered taxable if availed from an unidentifiable source.

Additional Read: Can We Get Tax Benefit on Personal Loan in 2021?

Personal finance tax benefits: When can you avail it?

Though not normally taxable, you can be eligible to claim personal loan tax benefits when the loan has been taken for particular purposes, as prescribed under the Income Tax Act of 1961.

Here are the specific end-uses for which you can claim tax benefits on your personal finance.

On credit used for business expansion

In case you have taken a personal loan for self-employed purposes, specifically for the expansion of your business firm, the interest you pay towards loan repayments will be eligible for a tax deduction.

On house improvement or renovation

Again, if the loan has been utilised towards home improvement or renovation, you will be eligible for a tax rebate, as per Section 24(b) of the Income Tax Act of 1961. In such a case, the interest you pay towards loan repayment, up to a maximum of Rs. 30,000, will be eligible.

Moreover, if you use up your personal finance amount on the improvement of a self-owned residential house, the Act allows a tax deduction of up to a maximum of Rs. 2 lakhs on the interest paid. On the other hand, if the house is a rented one, the total interest paid on the loan will be eligible for a tax deduction.

However, to avail the above-mentioned tax benefits, you must show proper documentation that proves that the loan amount was used towards home renovation.

Additional Read: Give a New Start To 2021 by Renovating Your House Using a Personal Loan

On the purchase of other assets

If your loan amount is invested in the purchase of any other assets such as non-residential house property, jewellery, gold, even shares and stocks, you can claim tax benefits on personal loan. In such a case, the interest paid towards loan repayment will be counted as the cost of asset acquisition, reducing total capital gains, thus providing tax benefits.

For educational purposes

Finally, if you take personal finance to meet expenses involved in securing higher education, you can avail tax rebates on the interest paid towards such loans. These benefits are available for a period of 8 years or until loan repayment, whichever is earlier.

In summation

So, you see; availing personal finance can help you save tax in 2023. If you’re planning to take such a loan, choose an authorised lender such as Tata Capital. Check your personal loan eligibility with us and avail up to a maximum amount of Rs. 25 lakhs.

You can customise your loan with us by using our online personal loan EMI calculator. Choose a loan amount and tenure that you’re comfortable with.

And since our personal loan interest rates start at just 10.99%, there’s no reason to wait! Get in touch with us today.

Fixed vs Floating Interest Rate Personal Loan – Which is Better?

It is no secret that before applying for a personal loan, gaining knowledge about optimal interest rates is of utmost importance.

While several people know what interest rates are, some are oblivious to the fact that there are two broad categories that exist: fixed and floating. It is vital to learn about these so that you make a well-informed decision on choosing the right loan. Thus, it’s time to look at fixed vs floating interest rate and see how they differ.

Getting the basics right

Before understanding the difference between fixed and floating interest rates for personal loans, let’s cover the essentials.

Fixed interest rates are when a lender charges a constant rate throughout the loan duration, hence the accrual interest doesn’t change.

On the other hand, floating interest rates, also called variable rates, are when a lender can make periodic revisions according to the repo rate changes, as per the RBI’s benchmark.

The benefits

  • A fixed interest rate remains unchanged throughout your loan’s duration. Whereas, floating interest has a lower starting rate, and helps to begin the loan tenure with favourable EMIs.
  • Fixed rates remain unaffected by market scenarios; hence you can rest assured about avoiding unpredictable rate fluctuations. However, the same lender often offers lower floating interest rates, approximately 1% to 2.5% lower than fixed ones.
  • While you can plan your EMIs better with fixed rates, there are chances that the personal loan interest rate may dip lower during the tenure, with a floating one.

Additional Read: Why Have Personal Loan Interest Rates Dropped So Low?

When to avail fixed interest rates?

  • If you don’t want your interest rate to be associated with market trend changes and lending rates, it’s best to stick with fixed rates.
  • If you want to adhere to the initially evaluated EMIs and repayment liabilities and don’t want any changes in your repayment plan, this is the best option.
  • If you foresee that interest rates will soon rise which will increase your EMIs, then this is your go-to.

When to avail floating interest rates?

  • If you can perceive repo cut trends, then floating rates is your best solution, as you’ll be able to keep repayment liabilities in check while interest accrual decreases.
  • If you see a potential income increase, this is a great option. Through this, you can prepay loan liabilities and thus, significantly save on prepayment fees and the total repayment amount. 
  • If you aren’t well-versed with market trends and want to stick to its rates, then floating interest is your go-to.

Additional Read: What is the difference between a Fixed and a Floating Interest Loan?

The clear winner?

Selecting the right one will ultimately narrow down to your requirements and preferences. However, now that you have a clear idea about both, you can choose the right one while applying for your personal loan.

Looking for a credible vendor to avail personal finance from? Head to Tata Capital – one of India’s most trusted lending institutions. Not only do we offer some of the most competitive interest rates in the country, we also extend a relatively more relaxed personal loan eligibility criteria.

Further, we require minimal paperwork and are always open to negotiating flexible repayment terms for personal loan for self-employed as well as salaried individuals. 

So, what are you waiting for? Apply today!

Eligibility Factors for Home Construction Loan

There’s nothing more enthralling for an aspiring homeowner than watching their house getting constructed; every brick and every stone turning into their dream home.

However, the exciting journey also entails a momentous amount of time, money, and coordination. Breathing some relief into such a project are home construction loans. The loans are customised specifically for financing expenses associated with the arduous process.

What is home construction finance?

While some opt for purchasing a fully-constructed ready-made house, others invest in constructing a home in ways they deem fit. Nowadays, you can get home construction financing to bear the expense incurred in building a new house. Unlike home loans, these carry a shorter tenure, and the amount is disbursed in various instalments depending on your construction work’s progress.

The significant difference between typical home loan and a house construction loan is the incremental disbursal of money. This unique feature allows you to request loan disbursal whenever the construction stage requires funds.

This way, borrowers don’t have to undergo the hassle of managing large amounts, and they get to focus on their dream house project. Besides, you only pay interest on the used funds instead of the entire pre-sanctioned amount.

Additional Read: Home Loan vs. Home Construction Loan

What are the eligibility criteria for availing a house construction loan?

Much like home finance, you must fulfil necessary home construction loan eligibility conditions set by various financial institutions.

Before sanctioning a construction loan, lenders usually ask for a detailed home construction plan, including the prospective materials to be utilised during the building process. 

Other eligibility criteria include parameters like a good credit score, proof of annual/monthly income, work experience, job stability, etc. Furthermore, some lenders also expect that if the property in use is co-owned, then the co-owner must be a loan co-applicant. Here’s a guide to understanding the eligibility criteria in detail.

Work:

Both salaried and self-employed professionals are typically eligible for availing a loan. Salaried individuals may require a work experience of two years, and self-employed should have experience of three years.

Age limit:

Like home loan eligibility, people falling in the age between 24 and 65 are typically eligible to avail home construction finance from lenders.

Credit Score:

A healthy credit score is pivotal to your loan application. Customers who have a credit score of 750 or more can easily avail a home building loan, provided other criteria are also matched.

Apart from these, you will also need to furnish documentation from your end as proof of income, identity, and residence. Moreover, borrowers must furnish land ownership documents, NOC from concerned authorities, estimated construction cost quotation, construction plan, and approved blueprints. Besides, to determine house construction loan interest rates, your lender may ask for more documents.

Additional Read: Home Construction Loan: Everything You Must Know

Wind-up

Nobody said building a house was easy, but who says financing it should not be? Whether a sleek contemporary design is on your mind or a Victorian outline, let Tata Capital back your construction with an easy house building loan.

Experience hassle-free processing and quick disbursal of funds with us today!