Products
Go Back to Main blog page
Why to invest in a Home Loan than in savings account or similar?
2
min read
86 views
2515 Likes
Saving and investing are two different concepts often confused as one. Both need a different financial approach and strategy and impact your financial independence in its own unique way. Hence, you cannot interchange it with each other. However, the fact still remains that when it comes to practical application of this theory, people tend to jumble up. A lot of investors ask if investing in a home loan is beneficial as compared to saving the funds in a savings or similar account.
If you too are having similar doubts, here are some facts that might help you decide:
What do you mean by savings in today time
Savings as a concept has been around for generations but the meaning has changed over time. Gone are the days when you would set aside a small amount and keep it in a jar or under the bed as security. Saving today means growing your money at a steady rate. It needs to be kept aside in a safe yet liquid security like a bank account or a fund that guarantees a steady income.
What do you mean by investing in today time
Investing means employing your money to buy an asset whose value is estimated to appreciate over time and offer good returns on the capital invested. This could involve a certain amount of volatility and risk for a considerably long term but the gains are proportionally high if the market appreciates the value of your asset.
So in such a time is investing in a home loan a wise option Or is it best to park the money in a savings account
To get an answer to this, you need to figure out how much capital you can set aside and save as compared to the expenses incurred in the time-based home loan payment. Consider the current price of your property to the one you might have to pay if you take a home loan of 15 years of or more along with a down payment of around 20%. Though your first thought might be of saving the cost of interest paid on the home loan, consider the fact that it has tax implications and you can avail deductions and exemptions in tax based on your home loan. Here are some quick pros and cons that can help you decide further.
Pros of parking your money and buying a home with hard cash as compared to investing in a home loan
1. If you have the cash or can be sure that it would grow to the required amount if parked in a savings account, you would save on the home loan interest.
2. You can also skip all the additional paperwork, handling charges and other costs and delays related to availing a home loan.
3. You do not have to worry about your credit history even if it is not maintained or in a bad shape.
4. You can have your home as your financial backup in tough times as you have complete ownership over it.
5. You look like a more attractive buyer since you are willing to buy the property upfront as compared to those willing to take it on loan.
6. Buying on cash can get you a better deal.
Cons of saving money and buying a home rather than investing in a home loan
1. A large chunk of your savings or capital gets tied to one asset which is not very liquid.
2. You might/ might not have enough funds to meet any emergency financial, medical or such needs.
3. The return on investment is lower as compared to stocks or some bonds.
4. You tend to lose the financial leverage provided by a mortgage since your payment is locked in.
5. You cannot avail the tax benefits entitled to a home loan.
Buying a home is a personal decision and the situation may vary from individual to individual. However, ensure that you weigh all the pros and cons before taking a decision. Ensure that you have enough savings to take care of all your personal expenses including insurance costs, utility bills, other EMIs and liabilities before you take a dip in your savings. If you feel you might need liquidity and urgent cash, going for a home loan would be a better option.
Tags
Latest Blogs
Non Housing Loans and More
62 views
|
0 Likes
Non Housing Loans and More
62 views
|
0 Likes
Non Housing Loans and More
62 views
|
0 Likes
Non Housing Loans and More
62 views
|
0 Likes
Non Housing Loans and More
62 views
|
0 Likes
Non Housing Loans and More
Get a Home Improvement Loan in 4 Easy Steps!
Read More
IIFL Home Loans | Jul 12 12:47 PM
15 views
|
0 Likes
Non Housing Loans and More
Get a Home Improvement Loan in 4 Easy Steps!
Read More
IIFL Home Loans | Jul 12 12:47 PM
15 views
|
0 Likes
Non Housing Loans and More
Get a Home Improvement Loan in 4 Easy Steps!
Read More
IIFL Home Loans | Jul 12 12:47 PM
15 views
|
0 Likes
Non Housing Loans and More
Get a Home Improvement Loan in 4 Easy Steps!
Read More
IIFL Home Loans | Jul 12 12:47 PM
15 views
|
0 Likes
Non Housing Loans and More
Get a Home Improvement Loan in 4 Easy Steps!
Read More
IIFL Home Loans | Jul 12 12:47 PM
15 views
|
0 Likes
Non Housing Loans and More
Save More With Tax Benefits of Home Renovation Loan
Read More
IIFL Home Loans | Jul 12 11:09 AM
21 views
|
0 Likes
Non Housing Loans and More
Save More With Tax Benefits of Home Renovation Loan
Read More
IIFL Home Loans | Jul 12 11:09 AM
21 views
|
0 Likes
Non Housing Loans and More
Save More With Tax Benefits of Home Renovation Loan
Read More
IIFL Home Loans | Jul 12 11:09 AM
21 views
|
0 Likes
Non Housing Loans and More
Save More With Tax Benefits of Home Renovation Loan
Read More
IIFL Home Loans | Jul 12 11:09 AM
21 views
|
0 Likes
Non Housing Loans and More
Smart Borrowing: Taking a Loan Against Property for Affordable Financing
Read More
IIFL Home Loans | Jun 02 7:21 AM
41 views
|
0 Likes
Non Housing Loans and More
Smart Borrowing: Taking a Loan Against Property for Affordable Financing
Read More
IIFL Home Loans | Jun 02 7:21 AM
41 views
|
0 Likes
Non Housing Loans and More
Smart Borrowing: Taking a Loan Against Property for Affordable Financing
Read More
IIFL Home Loans | Jun 02 7:21 AM
41 views
|
0 Likes
Non Housing Loans and More
Smart Borrowing: Taking a Loan Against Property for Affordable Financing
Read More
IIFL Home Loans | Jun 02 7:21 AM
41 views
|
0 Likes
Non Housing Loans and More
Smart Borrowing: Taking a Loan Against Property for Affordable Financing
Read More
IIFL Home Loans | Jun 02 7:21 AM
41 views
|
0 Likes
Non Housing Loans and More
Smart Borrowing: Taking a Loan Against Property for Affordable Financing
Read More
IIFL Home Loans | Jun 02 7:21 AM
41 views
|
0 Likes
Non Housing Loans and More
A Comprehensive Guide to Using a Loan Against Property EMI Calculator
Read More
IIFL Home Loans | Jun 02 7:21 AM
61 views
|
0 Likes
Non Housing Loans and More
A Comprehensive Guide to Using a Loan Against Property EMI Calculator
Read More
IIFL Home Loans | Jun 02 7:21 AM
61 views
|
0 Likes
Non Housing Loans and More
A Comprehensive Guide to Using a Loan Against Property EMI Calculator
Read More
IIFL Home Loans | Jun 02 7:21 AM
61 views
|
0 Likes
Non Housing Loans and More
A Comprehensive Guide to Using a Loan Against Property EMI Calculator
Read More
IIFL Home Loans | Jun 02 7:21 AM
61 views
|
0 Likes
Non Housing Loans and More
A Step-by-Step Guide to the Loan Against Property Process
Read More
IIFL Home Loans | Jun 02 7:21 AM
44 views
|
0 Likes
Non Housing Loans and More
A Step-by-Step Guide to the Loan Against Property Process
Read More
IIFL Home Loans | Jun 02 7:21 AM
44 views
|
0 Likes
Non Housing Loans and More
A Step-by-Step Guide to the Loan Against Property Process
Read More
IIFL Home Loans | Jun 02 7:21 AM
44 views
|
0 Likes
Non Housing Loans and More
A Step-by-Step Guide to the Loan Against Property Process
Read More
IIFL Home Loans | Jun 02 7:21 AM
44 views
|
0 Likes
Non Housing Loans and More
A Step-by-Step Guide to the Loan Against Property Process
Read More
IIFL Home Loans | Jun 02 7:21 AM
44 views
|
0 Likes
Non Housing Loans and More
A Step-by-Step Guide to the Loan Against Property Process
Read More
IIFL Home Loans | Jun 02 7:21 AM
44 views
|
0 Likes
Non Housing Loans and More
Invest in Your Home’s Future: Upgrade Today with a Specialized Renovation Loan
Read More
IIFL Home Loans | May 19 6:42 AM
46 views
|
0 Likes
Non Housing Loans and More
Invest in Your Home’s Future: Upgrade Today with a Specialized Renovation Loan
Read More
IIFL Home Loans | May 19 6:42 AM
46 views
|
0 Likes
Non Housing Loans and More
Invest in Your Home’s Future: Upgrade Today with a Specialized Renovation Loan
Read More
IIFL Home Loans | May 19 6:42 AM
46 views
|
0 Likes
Non Housing Loans and More
Invest in Your Home’s Future: Upgrade Today with a Specialized Renovation Loan
Read More
IIFL Home Loans | May 19 6:42 AM
46 views
|
0 Likes
Non Housing Loans and More
Unlock the Value of Your Property with a Loan: No ITR Required
Read More
IIFL Home Loans | May 19 6:42 AM
429 views
|
0 Likes
Non Housing Loans and More
Unlock the Value of Your Property with a Loan: No ITR Required
Read More
IIFL Home Loans | May 19 6:42 AM
429 views
|
0 Likes
Non Housing Loans and More
Unlock the Value of Your Property with a Loan: No ITR Required
Read More
IIFL Home Loans | May 19 6:42 AM
429 views
|
0 Likes
Non Housing Loans and More
Unlock the Value of Your Property with a Loan: No ITR Required
Read More
IIFL Home Loans | May 19 6:42 AM
429 views
|
0 Likes
Non Housing Loans and More
38 views
|
0 Likes
Non Housing Loans and More
38 views
|
0 Likes
Non Housing Loans and More
38 views
|
0 Likes
Non Housing Loans and More
38 views
|
0 Likes
Non Housing Loans and More
38 views
|
0 Likes
Non Housing Loans and More
Empowering local businessmen of the nation with IIFL SHAKTHI Loan against Property
Read More
IIFL Home Loans | Aug 02 11:53 AM
212 views
|
0 Likes
Non Housing Loans and More
Why to invest in a Home Loan than in savings account or similar?
Read More
IIFL Home Loans | Feb 26 1:45 PM
86 views
|
0 Likes
Non Housing Loans and More
Why to invest in a Home Loan than in savings account or similar?
Read More
IIFL Home Loans | Feb 26 1:45 PM
86 views
|
0 Likes
Non Housing Loans and More
What are loans against rentals?
Read More
IIFL Home Loans | Feb 22 1:30 PM
25 views
|
0 Likes
Non Housing Loans and More
What are loans against rentals?
Read More
IIFL Home Loans | Feb 22 1:30 PM
25 views
|
0 Likes
Non Housing Loans and More
What are loans against rentals?
Read More
IIFL Home Loans | Feb 22 1:30 PM
25 views
|
0 Likes
Non Housing Loans and More
What are loans against rentals?
Read More
IIFL Home Loans | Feb 22 1:30 PM
25 views
|
0 Likes
Non Housing Loans and More
How does loan against property help you with future financial emergencies?
Read More
IIFL Home Loans | Feb 22 1:15 PM
22 views
|
0 Likes
Non Housing Loans and More
How does loan against property help you with future financial emergencies?
Read More
IIFL Home Loans | Feb 22 1:15 PM
22 views
|
0 Likes
Non Housing Loans and More
How does loan against property help you with future financial emergencies?
Read More
IIFL Home Loans | Feb 22 1:15 PM
22 views
|
0 Likes
Non Housing Loans and More
Home Loan Versus Loan Against Property
Read More
IIFL Home Loans | Feb 21 6:15 PM
55 views
|
0 Likes
Non Housing Loans and More
Home Loan Versus Loan Against Property
Read More
IIFL Home Loans | Feb 21 6:15 PM
55 views
|
0 Likes
Non Housing Loans and More
Home Loan Versus Loan Against Property
Read More
IIFL Home Loans | Feb 21 6:15 PM
55 views
|
0 Likes
Non Housing Loans and More
Factors affecting Loan against Property Tenure
Read More
IIFL Home Loans | Feb 21 5:15 PM
26 views
|
0 Likes
Non Housing Loans and More
Factors affecting Loan against Property Tenure
Read More
IIFL Home Loans | Feb 21 5:15 PM
26 views
|
0 Likes
Non Housing Loans and More
Factors affecting Loan against Property Tenure
Read More
IIFL Home Loans | Feb 21 5:15 PM
26 views
|
0 Likes
Non Housing Loans and More
LAP - Loan Against Property Explained in Detail - IIFL Finance Blogs
Read More
IIFL Home Loans | Jan 01 12:15 PM
234 views
|
0 Likes
Non Housing Loans and More
LAP - Loan Against Property Explained in Detail - IIFL Finance Blogs
Read More
IIFL Home Loans | Jan 01 12:15 PM
234 views
|
0 Likes
Non Housing Loans and More
LAP - Loan Against Property Explained in Detail - IIFL Finance Blogs
Read More
IIFL Home Loans | Jan 01 12:15 PM
234 views
|
0 Likes
Non Housing Loans and More
Things That Can Go Wrong With Your CIBIL Report
Read More
IIFL Home Loans | Dec 04 11:15 AM
31 views
|
0 Likes
Non Housing Loans and More
Things That Can Go Wrong With Your CIBIL Report
Read More
IIFL Home Loans | Dec 04 11:15 AM
31 views
|
0 Likes
Non Housing Loans and More
Things That Can Go Wrong With Your CIBIL Report
Read More
IIFL Home Loans | Dec 04 11:15 AM
31 views
|
0 Likes
Non Housing Loans and More
Things That Can Go Wrong With Your CIBIL Report
Read More
IIFL Home Loans | Dec 04 11:15 AM
31 views
|
0 Likes
Non Housing Loans and More
Is your CIBIL score getting you down? Cibil Score
Read More
IIFL Home Loans | Dec 04 10:45 AM
1 view
|
0 Likes
Non Housing Loans and More
Is your CIBIL score getting you down? Cibil Score
Read More
IIFL Home Loans | Dec 04 10:45 AM
1 view
|
0 Likes
Non Housing Loans and More
Is your CIBIL score getting you down? Cibil Score
Read More
IIFL Home Loans | Dec 04 10:45 AM
1 view
|
0 Likes
Non Housing Loans and More
Is your CIBIL score getting you down? Cibil Score
Read More
IIFL Home Loans | Dec 04 10:45 AM
1 view
|
0 Likes
Non Housing Loans and More
How to get a personal loan with low CIBIL score?
Read More
IIFL Home Loans | Dec 04 10:30 AM
188 views
|
0 Likes
Non Housing Loans and More
How to get a personal loan with low CIBIL score?
Read More
IIFL Home Loans | Dec 04 10:30 AM
188 views
|
0 Likes
Non Housing Loans and More
How to get a personal loan with low CIBIL score?
Read More
IIFL Home Loans | Dec 04 10:30 AM
188 views
|
0 Likes
Non Housing Loans and More
How to get a personal loan with low CIBIL score?
Read More
IIFL Home Loans | Dec 04 10:30 AM
188 views
|
0 Likes
Non Housing Loans and More
Everything You Need to Know About Your CIBIL Score
Read More
IIFL Home Loans | Nov 02 12:00 PM
179 views
|
0 Likes
Non Housing Loans and More
Everything You Need to Know About Your CIBIL Score
Read More
IIFL Home Loans | Nov 02 12:00 PM
179 views
|
0 Likes
Non Housing Loans and More
Everything You Need to Know About Your CIBIL Score
Read More
IIFL Home Loans | Nov 02 12:00 PM
179 views
|
0 Likes
Non Housing Loans and More
Everything You Need to Know About Your CIBIL Score
Read More
IIFL Home Loans | Nov 02 12:00 PM
179 views
|
0 Likes
Non Housing Loans and More
Everything You Need to Know About Your CIBIL Score
Read More
IIFL Home Loans | Nov 02 12:00 PM
179 views
|
0 Likes
Non Housing Loans and More
Everything You Need to Know About Your CIBIL Score
Read More
IIFL Home Loans | Nov 02 12:00 PM
179 views
|
0 Likes
Non Housing Loans and More
Everything You Need to Know About Your CIBIL Score
Read More
IIFL Home Loans | Nov 02 12:00 PM
179 views
|
0 Likes
Non Housing Loans and More
Everything You Need to Know About Your CIBIL Score
Read More
IIFL Home Loans | Nov 02 12:00 PM
179 views
|
0 Likes
Prelude to Building Green - IIFL Home Loan's Guide to Sustainable Affordable Housing
Download report
Most Read Blogs
Non Housing Loans and More
A Comprehensive Guide to Using a Loan Against Property EMI Calculator
Read More
IIFL Home Loans | Jun 02 7:21 AM
61 views
|
0 Likes
Non Housing Loans and More
A Step-by-Step Guide to the Loan Against Property Process
Read More
IIFL Home Loans | Jun 02 7:21 AM
44 views
|
0 Likes
Non Housing Loans and More
Empowering local businessmen of the nation with IIFL SHAKTHI Loan against Property
Read More
IIFL Home Loans | Aug 02 11:53 AM
212 views
|
0 Likes
Non Housing Loans and More
Everything You Need to Know About Your CIBIL Score
Read More
IIFL Home Loans | Nov 02 12:00 PM
179 views
|
0 Likes
Non Housing Loans and More
Factors affecting Loan against Property Tenure
Read More
IIFL Home Loans | Feb 21 5:15 PM
26 views
|
0 Likes
Non Housing Loans and More
Get a Home Improvement Loan in 4 Easy Steps!
Read More
IIFL Home Loans | Jul 12 12:47 PM
15 views
|
0 Likes
Non Housing Loans and More
Home Loan Versus Loan Against Property
Read More
IIFL Home Loans | Feb 21 6:15 PM
55 views
|
0 Likes
Non Housing Loans and More
How does loan against property help you with future financial emergencies?
Read More
IIFL Home Loans | Feb 22 1:15 PM
22 views
|
0 Likes
Non Housing Loans and More
How to get a personal loan with low CIBIL score?
Read More
IIFL Home Loans | Dec 04 10:30 AM
188 views
|
0 Likes
Non Housing Loans and More
Invest in Your Home’s Future: Upgrade Today with a Specialized Renovation Loan
Read More
IIFL Home Loans | May 19 6:42 AM
46 views
|
0 Likes
Non Housing Loans and More
Is your CIBIL score getting you down? Cibil Score
Read More
IIFL Home Loans | Dec 04 10:45 AM
1 view
|
0 Likes
Non Housing Loans and More
LAP - Loan Against Property Explained in Detail - IIFL Finance Blogs
Read More
IIFL Home Loans | Jan 01 12:15 PM
234 views
|
0 Likes
Non Housing Loans and More
Save More With Tax Benefits of Home Renovation Loan
Read More
IIFL Home Loans | Jul 12 11:09 AM
21 views
|
0 Likes
Non Housing Loans and More
Smart Borrowing: Taking a Loan Against Property for Affordable Financing
Read More
IIFL Home Loans | Jun 02 7:21 AM
41 views
|
0 Likes
Non Housing Loans and More
38 views
|
0 Likes
Non Housing Loans and More
Things That Can Go Wrong With Your CIBIL Report
Read More
IIFL Home Loans | Dec 04 11:15 AM
31 views
|
0 Likes
Non Housing Loans and More
Unlock the Value of Your Property with a Loan: No ITR Required
Read More
IIFL Home Loans | May 19 6:42 AM
429 views
|
0 Likes
Non Housing Loans and More
What are loans against rentals?
Read More
IIFL Home Loans | Feb 22 1:30 PM
25 views
|
0 Likes
Non Housing Loans and More
Why to invest in a Home Loan than in savings account or similar?
Read More
IIFL Home Loans | Feb 26 1:45 PM
86 views
|
0 Likes
Non Housing Loans and More
62 views
|
0 Likes
Disclaimer: The information contained in this post is for general information purposes only. IIFL Home Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment, etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness, or of the results, etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability, and fitness for a particular purpose. Given the changing nature of laws, rules, and regulations, there may be delays, omissions, or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Home/ Loan Against Property/ Secured Business Loan/ Balance Transfer/ Home Improvement Loan/ NRI Home Loan/ Home Loan for Uniformed Services) loan product specifications and information that may be stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Home/ Loan Against Property/ Secured Business Loan/ Balance Transfer/ Home Improvement Loan/ NRI Home Loan/ Home Loan for Uniformed Services) loan.
