I have a housing loan from ICICI Bank and have been availing the income-tax benefit on both principle and interest up to Rs 1.3 lakh for the last four years. If I were to take a fresh loan from the same bank for repairs, will the interest portion of the new loan be eligible for the income-tax benefit?

Home improvement loans are available for the purpose of repairing an existing house. Assuming the home is self-occupied, you can claim the deduction under Section 24 in respect of interest payable on a loan taken for repair plus the earlier home loan taken to acquire the same property subject to a maximum of Rs 1.5 lakh per annum. If the house is not self-occupied, there is no limit on the deduction of such interest. You will have to prove that the loan was used for repairs. However, please note that you cannot claim tax benefits available under Section 80C for principal repayment of any repair or renewal loans taken.

I am interested in taking an education loan for purchasing a laptop. Can I do that?
If you are taking an education loan to finance your higher education, then the cost of equipment required to complete such a course, such as a laptop is normally covered under it. You can check with the bank for a confirmation. You are likely to get the loan if you apply for a proper education loan. Or else you can explore the option of a personal or consumer durable loan.

My salary is Rs 21,000 a month and I want to take a car loan in my husband’s name. Is that possible?
You can take car loan on your husband’s name, if your husband is a co-borrower. Normally, banks fund around 80-100 per cent of the ex-showroom cost (which excludes the octroi or local taxes and insurance) of the car. The loan will be around 2.5 or three times of your combined annual income, if you have no other loan to service.

How much loan can I get against my fixed deposit? Is it the whole amount? What about the interest rate?
You can borrow up to a maximum of 90 per cent against fixed deposits. The interest charged on such loans is generally one or two per cent higher than the interest rate you receive on your fixed deposits.

Which are the cheapest, simplest and best loans to take in case of an emergency?
Taking a loan against fixed deposit makes more sense not just because of its comparatively lower interest rate, but also because it involves less procedural hassles and documentation compared to the other loans.

Most importantly, in case of any unforeseen eventuality or inability to repay the loan, the borrower or his family will not have to face the brunt of repayment of the loan since the same will recovered by the bank from the borrower’s fixed deposit account. This will also ensure that you will not become a defaulter in such a scenario. In addition to the loan against fixed deposits, you can take loans against national savings certificates, jewellery, life insurance policies, mutual fund units and shares of reputed companies though the interest rates will always be higher compared to a loan against fixed deposits.

Harsh Roongta is the CEO of Apnapaisa.com. You can send in your queries to movingmoney
@deccanmail.com