Home loan, an amount of money that an individual borrows from a bank or money lending company at a certain rate of interest to be paid with the EMI (equated monthly installment) every month, is a popular term used when you think of buying a house or apartment.
It is really tough to find someone who hasn’t dreamed of building a house or buying a flat or apartment, especially in Dhaka. Yet in most cases, the dream has been ruined because of the economic capacity of people. To avail, a sufficient amount to buy a house or flat is a privilege that only a few people can enjoy.
Due to this reason, people who wish to own a house/apartment in Bangladesh end up taking a home loan. Usually, you would notice that at the end of the profession people used to manage a sufficient number of but still face a lack of money. However, the best alternative in any condition of borrowing money is a Bank loan, now this opportunity is looking so lucrative. Before deciding whether to go for a home loan or not, you must conduct a thorough analysis.
Advantages of House Loan
Suddenly or simultaneously getting a big amount of money may not be possible apart from some big fish and thus the common and justified reason why people opt for house loans and wish to achieve it.
However, Even if you have sufficient balance to buy a house, a home loan offers benefits such as low-interest rates, ensuring enough liquidity, benefits of tax and opportunity to let your funds grow, and so on.
There are a lot of benefits you can achieve by taking home loans and thus we are going to point them out below.
Liquidity Benefit
While you are thinking about your dream home, it needs a vast amount of liquid money in a trice, in spite of having the capacity of a fixed asset for example land, house, or any property in your hand needs liquid money.
To overcome the immediate response home helps you out most comparatively with less risk.
Low-Interest Rate
Another advantage of a home loan is that it is subject to a relatively lower interest rate than others. The biggest problem leaders face is that the borrower is unable to repay the loan.
Because of gaining the acquiring power, if a borrower fails to repay the loan, the lender can sell off the house to bring the money back, which gives a low-interest rate compared to other loans as well as make a win-win situation for both lenders and borrowers.
Tax Benefits
In Bangladesh, everyone wants to avoid the burden of taxes, you also are not exceptional of them, eagerly want to take the moment to take out house loans to receive income tax benefits.
The amount of tax that has to be paid to the government is reduced as the money that you pay as interest is going to be subtracted from the overall income tax value.
Disadvantages of House Loan
Before taking the decision analysis has to be carried out and it is wise to oversee the opposite part of the currency.
There is a possibility that your prediction may not be the right one since there are many disadvantages also present if you take out a home loan. In Bangladesh, home loan is a blessing in disguise, in some events we know where your dream has to be sold off to the lender.
Interest Rate
Even though the interest rate on a home loan is lower than other loans, in the end, a person has to pay more than he or she borrowed.
Now and then Interest rate becomes a curse for the borrower because after paying the EMI on time there is a chance of being principal outstanding is still the same as two years ago. This is the most significant disadvantage of taking a home loan.
A Long-term Commitment
Taking advantage of a home loan may turn into a disadvantage of a home loan if you are not well prepared for the long-term commitment. Hence it is a big amount, the repayment period will go on for many years.
During this period, you cannot take any other loans as you have to spend your real income on the repayment of loans. So, before opting for this loan, you have to prepare yourself for a long-term commitment.
Loss of Opportunity
In business, you never invest your money as well as your labor without expecting profit or benefit. While you invest one taka, definitely desire more return on your investment yet with a house loan you cannot expect profit rather than the loss on your investment.
Since the home loan is for a longer tenure, it is considered an opportunity lost. In spite of being a debatable point, some financial experts opine that you should never put all your eggs in one basket. Even if you have the sufficiency of buying a home without a loan, you should analyze and thus figure out the best possible utilization of your money.
Two-sided facts are there, now the ball is in your court, whether you are taking home loan or not. Sometimes it depends on your ability and other factors as well.
However, before going to final action take your time and cautiously work out each solution. If you move forward for home loan, you have multiple options to choose where you would get hold of home loan
