Choose the Right Home Loan Tenure
Loans are usually for the highest period of 15 years (that may go up to 20 years in some cases). Long tenure loans have less monthly payments. You can still get a huge loan on a comparatively small recurrent salary by electing to take a longer period loan.
However, the extended period loans may be more costly (higher rate of interest) even though the monthly payment amount is lower.
Long tenure loans are linked with considerable risk and weightlessness. The home loan interest rates can alternate either way and the inflation number could touch unanticipated highs. Borrowers must factor in interest rate variations and set aside funds to meet advances in EMIs.
Borrowers, who cannot bear the tension of rate fluctuations, favor to clear their accounts faster. Such borrowers opt for short tenure loans. Shorter tenure indicates larger EMI outflow month after month.
Though a short tenure signifies borrowers can unload their debts faster, many may find it challenging to set down a large part of their revenue towards the home loan repayment alone.
Normally all heading Housing Finance Companies in India like HDFC Bank, SBI, ICICI Bank, Indiabulls, Bank of Baroda, Reliance Consumer Finance, etc. offer flexible repayment tenures up to 20 years
Statistical confirmation also shows that most people take a longer home loan tenure of 10-15 years but end up repaying the same in 5-6 years. That happens as salaries invariably improve with time.
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