Buying a home not only gives you the comfort of living in your own space, but also brings with it financial safety and security. Unfortunately, many people do not realize their dream of owning a house because of the fear of loans, interests, EMIs, etc. Often due to being ill-informed about the benefits associated with home loans and other useful information that can help them realize their dream.
Home loans can be divided into two categories
One is the repayment of the principal amount and the other is the interest on home loans. Both the principal and the interest are eligible for tax benefits under Section 80C and 24 (b) of the Income Tax Act, 1961. However, in order to get these exemptions, there are certain conditions that you need to understand. For you to know more about the exemptions on home loan repayments, you would need to first understand how the interest is calculated.
For this, you would require a home loan tax calculator or a home loan calculator. This tax benefit calculator that helps you get a complete break-up of your repayments within a few minutes, thereby giving you a chance to review your payment options before even applying for the loan.
How Does a Home Loan Tax Benefit Calculator Work?
When you use a home loan EMI calculator, it will show you that in the early years of your EMI payments, the major part of your payments will be in the form of interest, while the principal amount will be less. A home loan tax calculator will show your interest amount as well as the principal payment amount that’s due after each year. The next column in the home loan tax calculator will show all your tax savings made each year that would be based on your income portion. For more information on tax benefits on home loans, you can contact Finserv MARKETS and get in touch with our expert to make an informed decision. from an expert.
How is the Repayment Schedule Prepared in this Home Loan Calculator?
The first thing to be calculated is the interest part of the EMI due every month. Once this is calculated, the interest amount would be reduced from your EMI and the difference will be considered as payment towards the principal outstanding. Hence, for the following month, the interest is then calculated on the reduced principal that is due after your last month’s payment towards the principal.
You can also pay more than your monthly EMI or a lump sum amount whenever you can. This will reduce your interest payments. The extra cash will be adjusted against your outstanding principal amount, which, eventually will also reduce your interest burden.
A home loan calculator is a good way to get an understanding about how home loans work and what benefits you can avail when applying for a Bajaj Finserv Home Loan at Finserv MARKETS. Tax benefits are a great way to get the best out of your home loans.
A home loan calculator will give you the amount beforehand and provide you with a clear picture of your repayment schedule and savings. In case of any confusions, you can contact a financial advisor to help you in understanding home loan tax benefits better.
Also read what are the types of home loan mortgages, difference between registered mortage vs equitable mortgage only at Finserv MARKETS.
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