As a student or at the start of your career, you may have shared a room with colleagues or friends. At that stage in your life, space was not important and often your decision would be based on the proximity to your college or office along with minimizing the expenses. However, as you move ahead in your life, you get married, and then start a family. This requires additional space and you often would like to own your home. You may buy a home or build one based on your financial situation. If you have the money needed to build a larger home at the start, you are amongst the lucky few. Having a larger home ensures you are able to accommodate the need for additional space as your family grows. However, if you do not have the financial resources to initially procure a larger home, you may extend it as and when required. The question is how you extend the home if you have already availed of a housing loan. There is no need to despair because a home loan is not only available to build or buy a property but may be used to extend it too.
Home extension loans
Indiabulls provides extension loans that allow you to extend your home to meet your additional space requirements. However, extension loans differ from improvement loans. The latter facility may be used to repair, renovate, or refurbish your home for more comfort or enhance the design.
Features of extension loans
- Home extension loans require minimal documentation and are available against the security of your property
- Such loans may be availed either from your existing housing loan lender or another institution
- Similar to a housing loan, extension loans are available for a certain period of time and are repaid in Equated Monthly Installments (EMIs)
- Usually, the home extension loan amount ranges between 75% and 80% of the estimated construction cost as the extension loan amount
You may apply for an extension loan either individually or jointly with your family members. If the property is owned by more than one owner, all co-owners must be co-applicants on the extension loan application. However, your family members may still be co-applicants even if they are not co-owners to increase the loan eligibility.
Benefits of home extension loans
These types of loans have several benefits as discussed below:
- Loan tenure Lenders often provide extension loans for a period of up to 20 years. However, factors like your age at the time of maturity, repayment scheme opted, and property’s age at loan maturity determines the loan tenure.
- Rate of interest At Indiabulls Home Loans, we provide these loans at an attractive rate of interest. The rate of interest for these loans is similar to the interest rate offered on regular housing loans. You may use a home loan EMI calculator to determine the approximate monthly instalment.
- Documentation requirements The entire procedure to apply for an extension loan is quick and simple. The documents required include identity and address proof, employment and income proof, estimated construction cost, latest income tax returns and Form 16 details, title deed, proof of no encumbrance, and bank statements.
- Tax benefits Tax benefits are available for extension loans under the Income Tax Act, 1961. A deduction of up to INR 1.5 lakh per annum is available under section 80C in case of principal repayment. Under section 24, an interest of up to INR 2 lakh per year is eligible for tax benefits if availed for self-occupied property.
If you do not want to move, extension loans are an excellent option when you require more space. These are convenient and may be availed as per your requirements.