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Decoding Home Loan Provisional Certificate in a Few Easy Steps

By IIFL Home Loans | Published On Jun 02 2023 7:21 AM 1 min read 1112 views 1067 Likes
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Home loan provisional certificate helps track repayment progress

Not only is getting a home loan an affordable and convenient financing option, but it also comes with a host of ways to organise and track your progress and claim the benefits a home loan offers. Both a home loan provisional certificate and a home loan provisional interest certificate are very important because they contain details of your payment system and offer many more benefits.

So, let's quickly understand the difference between them.

A home loan provisional certificate is the document that is given at the beginning of every year until your loan gets completed. It consists of payments to be made in this financial year.

A home loan provisional interest certificate is given at the end of every year until your loan gets completed. This document consists of payments that have been made in this financial year.

Now let's dig deeper for more insights.

What is a Home Loan Provisional Certificate?

The certificate is an official document provided by your lender. It gives you all the details about your loan status at the beginning of every year until the loan gets completed. It gives you brief details about your loan including the interest and principal payment for the current financial year.

Home Loan Provisional Certificate Contains:

  • Your personal details

  • Home loan account details, start and end date of loan.

  • The entire amount of the loan

  • Monthly equated monthly installments (EMI’s) amount.

  • Interest rate type: fixed or floating.

  • The amount you have paid

  • In case you have missed any payment, it will be included in the housing loan provisional certificate along with a new principal which accounts for missed payments.

This certificate contains the detailed break-up of your home loan. So now let's learn the benefits of it. 

Advantages of a Home Loan Provisional Certificate:

A housing loan provisional certificate helps you to organise all the information about your loan. As this certificate is received at the beginning of the year, it helps you with your financial planning on your end and keeps a record of how much you are going to pay monthly (EMIs) and yearly. Also, you can easily keep yourself updated on the amount repaid and due amount.

What is a Home Loan Provisional Interest Certificate?

Same as a provisional certificate, you get this provisional home loan interest certificate at the end of the year till your loan gets completed. It's evidence of the loan principal and interest payment you have completed during the current financial year. It acts as your proof of payment made to the lender. At the time of filing a tax return, you have to submit this home loan provisional interest certificate to avail of tax deduction.

Home loan provisional interest certificate contains:

  • Loan amount

  • Equated monthly payments (EMI’s)

  • Principal paid during the financial year

  • Interest paid during the financial year

  • Loan moratorium 

Do you know what a loan moratorium is?

A loan moratorium is a temporary suspension of loan repayment. It's a period where you can get a break on your loan repayment. This means you can stop the monthly payment or EMI for a specific time frame during the moratorium.

Advantages of a home loan provisional interest certificate

You need a home loan provisional interest certificate as proof of principal and interest paid during the financial year. This document is essential for claiming tax deductions. You will be required to submit the provisional certificate to your employer. Under Section 80c of the Income Tax Act, you can avail of tax deductions of up to Rs 1.5 lakh on the principal amount of the home loan. Also, you can get a tax deduction of up to Rs 2 lakh on the interest paid under Section 24 (b) of the income tax act. 

Have you availed of your tax deduction?

To get your home loan provisional interest certificate to avail of tax deduction visit our documentation portal. Drop a quick message in the chatbox on the screen to get help from our AI-based 24/7 customer support, Srishti.


Summing up

Home loan agreement between lender and homeowner

In this blog, we have learned that a home loan provisional certificate will help you to stay updated with your loan and the amount and interest to be paid during the financial year. Whereas a home loan interest certificate will help you to account for the payment already made this year. This certificate can also be beneficial for your tax deduction.

The certificates are all you need to get a lot of benefits on your home loan. Don't be afraid to go for your dreams and apply online now for a quick and easy home loan from IIFL Home Loans. We strive to bring affordable and flexible housing finance to your convenience. IIFL Home Loans cares about your dream of becoming a homeowner and we are eager to help you achieve it, every step of the way. Apply for your home loan today.

FAQ

  1. 1. How to get a home loan provisional certificate?

To get your home loan provisional certificate you should contact https://www.iiflhomeloans.com/home-loan. 

  1. 2. If I have a joint loan, can I use the same certificate to avail tax benefits?

Yes, you can use the same certificate to enjoy the tax benefits. As you have a joint loan, the interest amount will be divided equally.

  1. 3. What is the moratorium period?

Moratorium is a period where you can take a break from paying equated monthly installments (EMI’s).

  1. 4. Loan moratorium is included in the provisional interest certificate?

Yes, it is included in the home loan provisional interest certificate

  1. 5. What are the tax benefits we can avail of through these home loan certificates?

You can avail tax benefit under Section 80 C up to Rs 1.5 lakh on the principal amount and Section 24 (b) up to Rs 2 lakh on the principal amount with the help of provisional home loan interest certificate.

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