At any given moment, a person may have up to five outstanding home loans. Some people dream of owning many homes, while others only buy one in their lives. It might be need to obtain several house loans in order to accomplish this goal. As a result, it’s critical to understand the process and whether someone can take out several home loans.

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How many home loans can you take?

There can only be five house loans outstanding at any given time. After the current loans are closed, new loans may be obtained. However, the likelihood of receiving more loans is dependent on debt management skills and income. The total cost of repaying several house loans, each of which could last up to 30 years, can have an effect on savings and ability to make repayments. The financial status of an applicant may be closely examined by lenders. In order to maintain responsible lending standards, they could reject a loan application if there is a chance of default on a new house loan.

Variables influencing the quantity of home loans

Income at the time of application

The approval of your house loan application is influenced by your income at that time. Your income must be significantly higher to manage the financial commitment of an existing house loan.

Existing obligations

The approval of your loan is influenced by your present debts, including your home loan and any outstanding bills. Banks look at your Fixed Obligation to Income Ratio (FOIR) to make sure the total of all your debts doesn’t go above 50–60% of your net monthly income. Negotiating a longer tenure may be required if it exceeds this cap.

Job situation

Getting a new home loan is mostly dependent on the kind of work and reputation of the place of employment. As long as your income and debt levels are under control, working for a respectable organisation will boost your chances of being accepted. Approval may be impacted by changes in work status, such as going from salaried to self-employed. If the loan is rejected due to irregular income sources, lenders will review the operations of the business.

How should numerous house loans be managed?

Organising and carefully planning is necessary when managing several house loans. The following tactics will assist you in meeting your financial obligations:

Maintain thorough documentation: Keep thorough records of every house loan, including the principle amount, the payback schedule, and the dates of each payment. This will assist you in tracking your loan repayment progress and comprehending the details of each loan.

Make use of technology: To arrange and keep track of your house loans, use spreadsheets, apps, and financial management tools. You can never miss a payment by having automated alerts or reminders remind you when it’s time to make a payment.

Recognise the following terms and conditions: Learn the terms & conditions of every loan you take out, particularly if you have multiple lenders. Pay attention to any changes in interest rates, payment schedules, and penalty terms.

Align the due dates: Try to keep your mortgage payment due dates in line. This can help you manage several payments more easily and streamline your financial calendar. As an alternative, arrange the due dates so as to guarantee a consistent cash flow during the month.

Set loan repayment priorities: Decide which loan has the highest interest rate or the shortest term, then give that loan priority when it comes to payback. As soon as that debt is repaid, use the extra money to additional loans. You can reduce your interest payments by doing this.

Emergency fund: Keep an emergency fund on hand to handle unforeseen costs or changes in your financial circumstances. By acting as a safety net, this money keeps you from falling behind on any mortgage payments.

Frequent financial updates: To evaluate your overall financial health, do monthly financial check-ins. If necessary, modify your repayment plan and look into refinancing options to get better terms.

Several house loans: Deductions from taxes

When claiming tax benefits on a house loan, interest & principal amounts must be taken into account. Below is a summary of the main ideas:

Exemption from interest under Section 24B

• Under Section 24B of the Income Tax Act, interest paid on a home loan used for home construction, repair, or acquisition is deductible.
• You are eligible to receive interest benefits of up to Rs 2 lakh per year for a self-occupied property. The precise sum is dependent on a number of variables.
• If you own many homes, you are only eligible to get interest benefits on the one that you have designated as your primary residence. It is presumed that the second property is rented and is not eligible for an interest deduction.

Section 80C tax benefit on principal repayment

• Up to Rs 1.5 lakh can be deducted under Section 80C from the amount paid for housing loan-related expenses like stamp duty and registration.
• This advantage is only accessible if you have not started paying back the lender’s principal amount after obtaining the residence.
• Regardless of the overall amount spent, there is a maximum reimbursement of Rs 1.5 lakh for these costs.

Eligibility for interest deduction

• To be eligible for interest deductions, you might obtain the loan from banks, real estate firms, friends, or family.
• If the loan is for a home that is still under construction, interest paid up until the house is ready for occupancy may be reclaimed in five equal installments, up to a certain amount.

Tax benefits do not apply to principal repayment

Although tax benefits are available for interest, there is no provision for tax benefits related to principle repayment.

Requirements to get perks

• The property must be used for residential or commercial purposes in order to qualify for benefits under Sections 24B and 80C.
• Tax benefits become available only after the house is transferred into your name and all associated paperwork is finished.

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