About Personal Loan to buy a House
Should You Get a Personal Loan to buy a House?
Personal loan gives you the freedom to use your loan anywhere you want to use. You can meet any of your personal need with the help of a personal loan. If you are planning to buy a new house then should you go for a personal loan or not, however you can do so. Because in a personal loan bank does not put any restriction on the use of an amount of loan, but you are advised to not use your personal loan amount to buy a home. There are some reasons behind this
· The first reason is that usually the amount of loan offered by the bank in case of personal loan is less than offered by the home loan. To buy a home a large amount of money so you should go for a home loan rather than a personal loan.
· Another reason to go for a home loan to buy a house is that the rates of interest offered in case of personal loan are quite high as compared to the home loan. The home loan usually starts at the rate of 8.35% per annum usually. But rates of interest in a personal loan start from 10.75% minimum. The reason after this is the personal loan is an unsecured loan.
· Besides that, the tenure of the personal loan is shorter than that of a home loan. Your home loan can be extended up to 20 years but in the personal loan, the time period is not that large. You can get maximum 5 years to return the personal loan.
· Bank does not allow you to spend more than 40% of your net take income. Means you can use only 40% of your income to pay the EMI’s. So if you are planning to get a home loan and personal loan together then it may put you in a bad situation. Furthermore, it can create a financial imbalance in your life.
· Still, if you want to get two loans together then you need to plan properly because you have to pay two EMI’s together now. You should plan your expenditure according to this now.
· One more advantage of getting a home loan is that you will get tax benefits along with a home loan.
So you are advised to prefer a home loan over a personal loan to buy a house. You can easily apply for a home loan online. You will easily b able to get a home loan at easy rates of interest.