All You Need to Know About Home Loan Statement

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Home Loan

If you have availed of a home loan, then the bank will provide you with a home loan statement, also known as Statement Of Account (SOA), to update you regarding your loan status. It helps you keep track of your repayments and performance, along with a few details associated with your loan. So, what’s exactly a home loan statement, and how can you get it?

What is a Home Loan Statement?

A home loan statement shows the details of all the repayments made and bifurcates the EMI amount into principal and interest elements. Various details shown in a home loan statement includes:

  • Loan Amount
  • Start and end date of your loan
  • Home Loan Interest Rate
  • Type of interest (Floating rate or fixed rate)
  • The complete history of your loan repayment
  • Segregated interest and principal amount
  • Total amount repaid
  • Prepayment
  • Missed payments and their effect on the principal amount
  • Expected amount to be repaid in a particular year

The above points depict the importance of a home loan statement.

Why do you need a Home Loan Statement?

As home loan statement shows your repayments in detail, therefore, it becomes an important document primarily for the following purposes:

   1. Interest deduction: Income Tax Act, 1961 provides a deduction of interest paid on the home loan. If you have an under-construction home financed through a home loan, then the interest component you paid during the construction period can be claimed as a deduction from your income. This is known as pre-construction period interest. However, the deduction can be availed only after completion of the construction and in 5 equal installments, and the maximum amount of deduction allowed is Rs. 2 lakhs.

Apart from that, if your home loan is to purchase a house, the deduction for the interest component is still allowable under section 24(b) of the Income Tax Act, 1961. If you have self-occupied that property, then the maximum deduction allowed is Rs. 2 lakhs. In other cases, there is no limit on the amount of deduction.

   2. Principal Deduction: Section 80C of the Income Tax Act, 1961 provides for deduction of home loan principal repayment from your gross total income. This deduction is allowed up to a maximum limit of Rs. 1,50,000 in a financial year. Therefore, you will require a home loan statement to know the principal and interest components of your EMI amount to claim the deductions.

    3. Availing of another loan: If you want to avail of another loan, then the lender may ask for loan statements of your outstanding loans for the last 6 months to 1 year to assess your credit performance. This shows whether you have been regular with your loan repayments or not.

   4. Balance Transfer: If you consider transferring your home loan, then the second lender may ask for a home loan statement as well.

How Can I Get My Home Loan Statement?

While some lenders mail the home loan statements to the borrowers annually, others may provide them upon request. To get your home loan statement, you need to contact your lender. You can also apply for a home loan statement online by logging in to your lender’s website. Certain fees may be levied depending upon the lender’s policy.

Bottom Line

A home loan statement is an important document, especially when you are filing your tax returns or looking for another loan. If you are looking to apply for a home loan but are concerned about EMI amounts, then you can use the home loan EMI calculator. You just need to enter the loan amount, home loan interest rate, and tenure to get the exact amount of EMI you will need to pay. Currently, home loans are some of the most affordable tools available at just a 6.70% per annum interest rate. So, Apply Now!