Factors that can affect your Home Loan tenure

Everyone dreams of buying their own home someday. It is an investment that gives shelter and safety. In case of crisis, this investment turns out to be useful. When buying a home, most people prefer opting for home loans as they do not have that much money available with them.

Opting for housing loan makes it convenient to buy a house and the buyer can pay the bank through Easy Monthly installment (EMI). The duration of the home loan is also a crucial factor here. Most banks offer loan for 5-20 years. Some may extend that period to 30 years as well. This tenure or the time period for loan repayment depends on various factors.

Age of home buyer

For someone who is young, say about 25 years, he can easily work for another 30 years. So he can pay EMI for a longer duration. The banks look into the loaner’s age and the retirement age as per his career. A young professional will definitely get the best home loan in India with longer tenure as compared to someone in his 40s, who may find it a bit more difficult.

Salary or income

The home loan is furnished as per the buyer’s income. The banks and NBFI look into the salary to determine if the applicant has it in his capacity to repay the loan without defaulting on the EMIs. The EMI amount should not be more than 40% of the applicant’s take home salary. For instance, if someone is earning Rs.1 lac, he can pay an EMI of Rs. 40,000. The loan amount is granted accordingly and you may be able to get a longer tenure for it.

EMI

When applying for housing loan, make sure that the EMI is within one’s capacity. Paying the EMI for years may be taxing for some people. So if you don’t want a longer tenure then the EMI would be high. But if you want a lower EMI that you can pay comfortably, it is good to opt for home loans with longer tenure.

These are some of the factors which are important while considering home loan tenure. But apart from this, it is important to check the interest rate also. A lower interest rate would mean lower EMI and helps save money on the house. To get a good interest rate, home buyers can also contact Non financial banking institutes and apply for home loans through them.