Home Loans For Long term Requirements: Everyone dreams of buying their own house, but to fulfill it, most of the people have to take the help of home loan. Due to this, we are going to tell you that if you are going to take a home loan for a long period, then you will have to keep these special things in mind….
In this era of inflation, buying a house is not within everyone’s reach. But nowadays, the trend of taking home loans to fulfill this dream is continuously increasing. You buy a house by taking a home loan from the bank, but the repayment of the loan lasts for a long time.
Generally, the period for which loan is offered by the bank is 30 years. But now loans up to 40 years are also available in the market. In this, you get the opportunity to decide the tenure of the home loan as per your needs for a long period. It seems easier to take a home loan for long term, because the EMI of the loan is less. However, it is not that easy.
No immediate financial burden with long tenure –
Loan tenure means the time within which you repay the entire home loan with the Equated Monthly Installment (EMI) decided by the bank or financial institution. Since, housing loan is a big loan, where the loan amount is large. Therefore, it is difficult to repay the entire loan amount in one go. Due to the long period of loan repayment, there is no immediate financial burden on people.
But the long repayment period means that the person who has taken the loan will have to repay it for a long time. For example, a 30-37 year old person can repay the loan till he reaches the age of 70-75 years for a 40 year loan available in the market. This thing looks good on paper. But you have to think about how he will pay the money after retirement, because it is not possible in most cases for him to continue working even at this age.
In this way you can reduce the EMI of home loan –
However, the advantage of increasing the loan repayment period is that the EMI of home loan keeps decreasing every month. This makes the loan affordable, because while deciding the amount of EMI on the loan, everyone first checks whether it is affordable on the basis of their income or not.
It may happen that a person needs a large loan amount, but if it is for a tenure of 20 to 25 years, then the EMI amount will be very high. Therefore, in such a situation, a longer tenure will help in reducing the EMI and make it affordable, but its affordable appearance can also be deceiving.
Higher interest will have to be paid on long period loan repayment –
If you take a huge loan with a long period, it will also have a negative impact. That is interest. This not only lengthens the loan tenure, but also increases the amount of interest to be paid. There is also a difference in loan interest rates in different banks. Before taking the loan, you should analyze the cost and include it in the repayment plan. Apart from this, you can repay some of the loan amount from the available funds in the initial years of the loan, as this will reduce the interest cost.
Keep these things in mind while taking a home loan –
While taking a home loan, there should be a clear strategy regarding the loan amount and the method of repaying it. If the loan amount is large and the repayment period is long, then its impact will also be big. But special care should be taken as to how the loan will be repaid.
In such a situation, it would be better to repay some part of the loan in the initial years. Let it be given. With this, you will be able to reduce the amount you have to pay as interest. At the same time, many people decide to take a loan after seeing the EMI amount or interest rate, this should also be kept in mind. Because this is not the right way. If interest rates are increasing, you will have to include the cost and impact of the loan accordingly in your calculations. Because most home loans are floating.
The individual should have full opportunity to decide that if things do not go well on the interest rates front, there will be no pressure on his financial position. A long term loan may seem economical, but it costs more.
