Dreaming of Buying a Home? Why Not Choose a Chit Fund for Your Home purchase?

Undoubtedly buying a home is a dream and a huge milestone for many. With the soaring real estate rates, investing in a house seems like a far-fetched dream for many. Arranging money for such a huge investment is a challenge.

When it comes to saving for a home, there are several ways to do so – from home loans to traditional savings accounts and recurring deposits. Traditional home loans often come with high interest rates, lengthy paperwork, and strict eligibility criteria. If you are looking for a smarter and more flexible way to finance your dream home, why not consider a chit fund for a home purchase?

Before getting into the world of Chit Funds and how it can help you buy your dream home, let us first know what exactly is a chit Fund and how it works.

What are Chit Funds?

Chit Fund is a type of financial group saving plan popular in India. It has been a popular investment option among Indians for a long time. In this, a group of people contributes a fixed amount every month into a pool. Every month, one member wins the collected amount through a bidding process or by lottery. The beauty of chit funds is that you can either save or borrow from the fund depending on your needs. This acts as both a saving as well as a credit product.

If you are planning to buy a house with a chit fund, you can use the winning amount towards the down payment or even to cover a big portion of the property cost.

Chit Funds for Buying a Home

Using a chit fund for home purchase offers several benefits:

• Flexible home financing options: You don't have to run for hundreds of paper work and do not need to meet tough banking rules. Whether you are salaried, self-employed, or a small business owner, chit funds are open to all.
• Zero-interest home funding: If you win the chit early and use it wisely, you avoid paying the heavy interest charges that come with regular home loans.
• Chit fund maturity for real estate: If you patiently stay till the end of the chit fund cycle, you get a lump sum amount that can be used to buy your home without any loan stress.
• Government-approved chit funds: Always choose a registered and government-approved chit fund to ensure your money is safe.

How to Use a Chit Fund for Home Purchase

Here’s a simple step-by-step guide to help you understand how you can buy a house with chit fund:

1. Research About Chit Funds – People often get brainwashed when it comes to money. It is important to understand the concept of chit funds before joining it.

2. Join a Trusted Chit Fund - Start by joining a government-approved chit fund that suits your budget and goals. Make sure the chit fund organizer is licensed and has a good reputation. Some chit funds even have special schemes meant for dream home financing.

3. Contribute Regularly - Every month, you will have to pay a fixed amount. Think of it as a disciplined savings method. This habit not only helps you save but also builds your eligibility to win the total fund early.

4. Plan Your Bidding Strategy - The bidding is the most important part of a chit fund. You can either wait till the fund matures or bid early when you urgently need the money. Bidding smartly is the key.

5. Use Chit Fund Maturity for Real Estate - If you don’t bid early, you can wait till the end and receive the full chit fund maturity for real estate investment. This lump sum can act as a strong base to either pay a larger part of the house cost or get better loan terms from banks.

If you’re planning to buy a house and want to explore more options other than traditional home loans, then Chit Funds are a good option for you. It is a practical and more manageable way to build your savings. So, let your dream of buying a house turn into reality as you take control of your savings with Chit Funds.