How to Save Money on Your Home Loan and Taxes
Are you tired of feeling like you’re throwing money away on interest payments and taxes? You’re not alone. Many people struggle to make ends meet, but with a few simple strategies, you can save thousands of dollars on your home loan and taxes.
The Importance of a Shorter Loan Tenure
When it comes to home loans, the longer the tenure, the more you’ll pay in interest. In fact, a Rs 50 lakh loan at 9% interest for 10 years will result in a total interest payment of Rs 26 lakh. Extending the tenure to 15 years increases the interest outgo to Rs 41 lakh, and a 20-year loan will result in an interest outgo of Rs 58 lakh. Ouch!
But there’s hope. By increasing your EMI amount gradually as your income rises, you can reduce the tenure of a 20-year loan by nearly eight years. That’s a huge saving!
The Power of Insurance
When considering a home loan, it’s crucial to evaluate the insurance options offered by the lender. While it’s wise to secure life insurance alongside a substantial loan to protect your dependents from unpaid debt, the policies sold by banks may have limitations. These policies are often linked to the loan and may not be transferable, meaning they will terminate if you switch lenders during the loan tenure. Therefore, it’s advisable to buy separate term insurance, as the coverage will continue even if you prepay the loan or change your lender.
Insurance options to consider
The Benefits of Joint Loans
If you have a working spouse, consider taking a joint home loan to maximize tax benefits. The government allows a deduction of up to Rs 2 lakh on the interest paid on a home loan. However, with rising home prices, the average loan amount has increased significantly in recent years. At a 9% interest rate, a Rs 50 lakh home loan for 20 years would result in an annual interest of approximately Rs 4.5 lakh.
If your spouse earns as well, you can jointly claim up to Rs 4 lakh in deductions if both husband and wife take a joint home loan and each claims a Rs 2 lakh deduction individually. Additionally, some states offer lower stamp duty rates if the property is registered in a woman’s name. For example, in Delhi, the stamp duty is 6% for male buyers, while female buyers pay only 4%.
Joint loans can save you thousands
How to Haggle Your Way to Savings
Did you know that you can haggle your way to lower bills? One Martin Lewis fan saved £300 a year on his mobile bill by following a simple tip: haggling with his provider. By being charming and polite, you can negotiate a better deal on your bills.
Haggling can save you hundreds
Maximizing Your Tax Savings
The Indian tax system has changed, and it’s essential to understand the new rules to maximize your tax savings. From transportation allowances to job creation deductions, there are many ways to reduce your tax liability. By claiming exemptions on gifts, travel, and NPS contributions, you can save thousands of dollars on your taxes.
Maximize your tax savings
By following these simple tips, you can save thousands of dollars on your home loan and taxes. Remember to always evaluate your insurance options, consider joint loans, and haggle your way to lower bills. With a little bit of effort, you can maximize your tax savings and achieve financial freedom.
