Everybody wants to live in a big, spacious house but more often than not, even with an increase in income the dream of living in a beautiful spacious house never becomes a reality. The cost of living and taking care of a growing family often takes a toll on our finances and leaves us with nothing but an empty dream of moving to a big house. In such a situation, Home Extension Loan can play a great role. This home loan option helps to expand the space of an old house and aims at fulfilling the dream of the people who have always wanted to live in a big house but couldn’t afford to do so. Most people confuse Home Extension loans with improvement loans, while the former home loan options help to meet the need of additional space of the people, the latter aims at facilitating renovations, repairs, and refurbishing of an existing home.
Let’s look at the features and benefits of Home Extension Loans that can help to expand your home.
- Option to choose: One can easily avail this type of home loan from any loan and financial institutions or qualified home loan
- Less paperwork: Quick loan can be availed with minimal documentation of address proof, identity proof, income proof, bank statements, details of form no 16 and current income tax returns, title deed, construction cost, and no encumbrance proof.
- Re-payment option: One can avail the loan for a prefixed period of time and repay the amount of loan taken through regular Equated Monthly Instalments.
- The Term of Loan: Depending on the policies of the lending institution and other determining factors like borrower’s age, chosen repayment option and age of property on maturity, borrowers can avail a Home extension loan up to a term of 20 years.
- InterestRate: When borrowers avail a home extension loan through a reputed institution, they enjoy attractive interest rates on the loan amount that is quite similar to the rates applied on a regular home loan.
- Tax Advantage: Home Extension Loan that falls under the defined income Tax Act, 1961 under 80C is deemed applicable for a deduction of up to Rs.1.5 lakh p.a. when it comes to the payment of the principal amount. While an interest of Rs.2 lakh p.a. is deemed eligible to avail tax benefits on the property that is occupied by the borrower.
- The Loan Amount: The amount of loan that a borrower can avail, usually, ranges between 75% -80% of the total appraised cost of construction.
Those who are not seeking to move into a new place but actually want to extend the space of their existing home should opt for Home Extension Loan from a trusted and qualified financial institution or individual. In order to increase your Home Extension Loan eligibility, you can apply for the loan as a joint applicant along with your other family members.