We all understand that paying off a home loan is a lengthy process that requires patience and planning. Every year of your tenure, you pay off a certain portion of the home loan principal amount along with the interest component. But how do you learn and track what portion of the loan amount you have paid so far, what is left, and other details?
The answer is a home loan statement.
As you can imagine, it is a vital document containing information on your loan repayment that the lender provides you annually. With the help of a loan statement, one can figure out how long it will take to pay off your home loan. It also shows you how much money you’ve paid back and what you still owe on your housing loan. This makes it a crucial tool to plan and take care of your finances in advance.
Let’s learn more about it.
What is a Home Loan Statement?
Essentially, a home loan statement represents a detailed summary of your home loan repayment throughout a financial year. It tells you how much interest and money you owe on your loan, whether you have missed out on any EMIs or whether you have pre-paid any amount.
Hence, it is a hassle-free way of keeping a track record of your home loan repayment. As such, a home loan statement consists of the following details:
- Terms of Home Loan: These include the total loan amount, interest rate, tenure, starting and end date of the repayment period, EMI, etc.
- Details About the Home Loan Account: These include opening balance, closing balance, any credits or debits made during the financial year, etc.
- Due Amount: It tells you how much money you still owe on your home loan.
- Statement Period: It shows how long a loan is for and what was the period during which the listed EMI transactions were made.
- Transaction Activity: It shows any penalties or fees during the loan tenure.
- Unpaid Principal Balance: The home loan amount that hasn’t been paid is also shown on the loan statement.
Did you know that a home loan statement is also called a home loan provisional certificate?
What Makes a Housing Loan Statement Important?
A home loan certificate is important for various reasons:
- It helps you keep a close eye on your home loan activities. With the housing loan statement, you can determine how much money you owe, when your next payment is, and more. This way, you have absolute clarity about the repayment structure and schedule.
- It makes it easier to get a loan because it shows that you’ve paid back the money you took out of a loan account.
- It is proof of payment of a home loan.
- The loan statements are vital if you get tax breaks on your home loan.
- Under Income Tax Act’s Section 80C, you can deduct over Rs. 1,50,000 from the principal amount of your loan in tax.
- If you pay interest on your home loan, Income Tax Act’s Section 24 lets you write off up to Rs. 2,00,000 of that money.
- The government doesn’t set a cap on how much you can deduct from a property that is being let out.
How to Download a Home Loan Provisional Certificate?
A provisional certificate for a home loan can be found on the app or website of your lender. You should have a password and login-id that the bank gave you to download home loan statement.
Some Tricks to Maintain a Home Loan Account
- Make sure you understand how your home loan interest works and it’s added to your loan account.
- Always pay your credit card bill before or on the due date, no matter what. If you will miss an EMI, make sure you tell your lender or bank first.
- Set up an auto-pay or a direct debit pay for your bills to automatically deduct money from your chosen bank account. This way, you won’t have to worry about late fees. If you set up an auto-pay, make sure you have sufficient money in your account. If you don’t, you could be levied a fee for not being able to pay.
- Pay more than the minimum amount you owe every month, and you could save years off your loan.
- Make sure you understand and read the T&C of your loan account, so there are zero surprises when you get your home loan.
Conclusion
As we have read, a home loan statement is a precious document that validates your repayment history and helps you with tax savings. Usually, all home loan borrowers get their loan statements on their registered email ID. However, if you want to apply for a home loan statement online, you can now do so through PNB Housing’s customer portal or reach out to our representatives at any time.
