16 JUNE, 2022

Experts believe that you should start managing your money and take crucial financial decisions early in your life when you have the chance to learn and make mistakes. After all, some decisions taken at a younger age bear better fruits in the future. This is why it is suggested to start investments and open a savings account as early as possible. Such timely made decisions help you flourish and build wealth with the passing of time. Another such financial decision is buying a home. It is believed that it is best to apply for a home loan at a young age. Applying for a home loan while you are young and at the beginning of your career gives you more time to manage it well and repay timely. Here are various benefits of applying for a home loan at a young age. Read on.


  • Longer tenure and lower EMI

Even if you cannot shell out a higher Equated Monthly Instalment (EMI) for your home loan in the initial years of your career, you can opt for a longer tenure. Lenders easily give a long tenure to young applicants as they have more income-earning years ahead of them to repay the loan. When you opt for a longer tenure, you can pay lower EMI and comfortably save and spend for your other life goals. Availing home loans at a younger age also means you can pay off your debt before retiring and lead a debt-free comfortable life in the later years.


  • Tax benefits

With a home loan, you can save on taxes. Tax deductions available on home loans can help you reduce your taxable income. You can claim tax deductions on the repayment of the home loan principal and interest amount under sections 80C and 24(b) respectively, of the Income Tax Act, 1961.


  • Lesser responsibility

When you are in your prime earning years, you have more opportunities to grow in your work. You can take risks and get a higher income through hard work and dedication. Moreover, usually, you have fewer financial obligations towards your home and family. These two factors can allow you to pay a higher EMI and close your loan at the earliest if you apply for home loan at a young age.


  • Lucrative investment

House property is a lucrative investment. If you are in your 20s, you could prefer to live with your parents. However, still your house can help you earn rental income. The home loan would help you invest in an appreciative house property that will help you earn rental income. 


  • Secured asset

Your home is a secured asset that can act as your security in your good and bad times. It secures steady returns for you when you put it on rent. Also, the value of a house property typically tends to grow with time. Having a home also instils a feeling of inclusiveness among the community and is a fixed address for your family.

Despite the recent hike in the repo rate, home loan interest rates are at an all-time low. If you have started earning and can shell out a few thousand from your income for the EMI, it is best to avail a home loan and buy your home while you are young. However, ensure to gather enough knowledge about the loan and check your home loan eligibility first.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.