All about a home improvement loan!

Home Loan

Under Section 24 of the Income Tax Act, the interest paid on the home improvement loan is tax deductible up to Rs 30,000 per annum. Both the owner and co owner are eligible for tax deduction on the interest paid on such loans. The downside is that the deduction is part of the overall tax benefit of Rs 1, 50,000 available under the section for interest paid on housing loans.

Fixed Rate Loans: 2% of outstanding amount

Fixed Rate Loans: 2% of outstanding amount

Fixed Rate Loans: 2%/3% for balance transfer; Nil if repaid from own sources after 6 months from final disbursement, else 2%/3%

Axis Bank ICICI Bank IDBI Bank State Bank of India Union Bank of India
Interest rate per annum for floating rate home loans Base rate = 10.25% 10.5% to 11.5% Base rate, ie: 10.25% 10.15% Base rate = 10.25%
Maximum tenure 25 years 20 years 25 years 30 years 25 years
Processing charges Upto 1% of the loan amount 0.50% – 1.00% of the loan amount or Rs. 1500/- (Rs. 2000/- for Mumbai, Delhi & Bangalore), whichever is higher + applicable Service Tax & Surcharge 0.5% of loan amount 0.125% of loan amount (minimum of Rs.1000/- and maximum Rs.5000/- ) 0.5% of loan amount subject to maximum of Rs. 15000. Waived till 31 st March 2013
Pre-payment charges Floating Rate Loans: Nil Floating Rate Loans: Nil Floating Rate Loans: Nil Nil Floating Rate Loans: Nil  Floating Rate Loans: Nil Fixed Rate Loans: 2% for balance transfer, Nil if repaid from own sources
Margin 20% 20% 20% 20% 20%
Exclusions from margin money All removable items including cabinets and furniture All removable items including cabinets and furniture All removable items including cabinets and furniture All removable items including cabinets and furniture All removable items including cabinets and furniture

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