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

The past year was quite hard due to the pandemic and the repercussion of it. The world in itself had to bear mammoth human loss along with the dent in the financial condition. As a result, home loan buyers, most of whom belong to the middle and low-income category, were hit severally. But with Budget 2021, there were certain attempts made to facilitate the aggrieved parties.Here's what you should expect from the budget 2021:

• Home Loan Principal Amount and Interest Rates In the aftermath of COVID, the lenders have witnessed slow economic growth. Though RBI has not changed the repo rate, some of the major lenders have changed their interest rates by about 0.25% and more. This means the interest rates have increased this time. Along with that, lenders have also made strict steps for dispersing the principal amount.
• Sanction letters are strictly based on eligibility The loan sanctions have become strict than that of the past, with more focus on eligibility. The lenders require a full set of criteria and a good credit score to get a home loan. The loan amount, interest rates, and tenure also are based on the eligibility criteria and credit score.

• Tax deduction The budget 2021 came with some good news in the form of additional tax benefits for the users. If you are someone looking for a home loan in 2021, you can avail of an additional tax benefit of Rs 1.5 lakhs under the ARHC scheme. The scheme is for an affordable rental housing complex that is valued at under Rs 45 lakhs. This will go on top of your existing tax deductions of up to 2 lakhs.

• A Surge in demand for Home Loans The additional exemption is a great tool to help boost the demand for affordable housing in this post-Covid world. Many home loan buyers previously with a reserved view will likely take this option and seek home loans. This is a significant opportunity for people to buy their dream home they have been holding out for.

• MCLR Vs RLLR It’s wise to know about the Marginal Cost of Funds based Lending Rate (MCLR) and the Repo Linked Lending Rate (RLLR) before going for a home loan 2021. Talk with the lender and do your thorough research before going with the type of lending rate that benefits you.
• Interest Rates A few lenders have increased their loan rates, while most of them are still offering the same rates as earlier. Check with them and compare the rates to find the best deal. Even a one per cent drop in the interest rate can save you aplenty in the overall outlay.

Home loans are a great way to finance your dreams of having a home. However, with the pandemic still hovering around, finances and the economy have been hit hard. Finding a good home loan deal that would benefit you amidst the situation would be the best way to go during 2021.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.