5 things to consider before taking Personal Loan for down payment of your house
Government mission of housing for all, introduction of RERA, subsidy schemes for first time home buyers and the current scenario where developers looking to offload their inventory and offering various incentives makes 2019 a great time for a home buyer. However, buying a home can still be an overwhelming process.
Finding the right home is not an easy task and once you have found your dream home, starts the rush to arrange funds. Your immediate requirement is to arrange the token amount, down payment and the additional costs that come along with a property purchase. While you plan to take a home loan, these additional costs need to be paid immediately. You can pay it with the funds you would have saved to make this investment and apply for a home loan.
However, in case where you are falling short of funds or do not wish to break your investments before maturity, availing personal loans can be a good option for a down payment of your property. Financial institutions like RattanIndia Finance let you avail personal loans for down payment of your home. Below are the five things to consider while using the personal loan as your down payment:
First and most important thing to remember when availing a personal loan for down payment alongside a home loan is that the sum of both your EMIs should not exceed 40% of your net monthly income.
Taking a personal loan means paying two EMIs. You should be able to manage your regular expenses after the repayment process starts. You should also keep in mind that availing an additional loan in case of any emergency might be difficult.
One of the rewards of taking a personal loan for making the down-payment for a property purchase or carry out renovation work is that you can avail tax benefits. You can claim up to Rs 2 lakh on the interest paid against the personal loan.
Taking a personal loan will also help you to continue your investments. Your savings will remain untouched, while you repay the loan on a monthly basis from your current income.
However, you need to consider all your savings and investments that can be used for down payment before you apply for a personal loan. Personal loans are unsecured loans have a higher rate of interest compared to home loans. Interest rates for personal loan can range from anywhere between 11% to 20% compared to home loans which comes at around 8.5% to 9%. You should be ready for this additional burden.
Once you have found your dream home and have a plan to make the payment, financial institutions like RattanIndia Finance can help you fill the gap. So, let the search of your dream home begin.
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15 Jan 2020