Nonetheless, availing a housing loan also depends on certain factors, where tenor plays a crucial role.
Factors to consider when choosing the home loan tenor
Monthly income
Understanding home loan EMI aids borrowers in the systematic planning of monthly outlays. An individual’s income stability plays a crucial role in determining the home loan tenor. In this scenario, an applicant must know that opting for a shorter tenor would mandate paying higher EMI. Comparatively, selecting a longer tenor would decrease the EMI but increase the total interest outgo.
Hence, a shorter tenor is a compatible option, as it reduces the chances of accumulating higher debt in the long run. An individual with a stable income can request a lender for a befitting tenor option.
Age
Age is again a crucial factor when deciding a home loan tenor. Lenders give more preference to young borrowers who have more workable years. They easily approve a young borrower’s request to repay the outstanding amount over a longer tenor. Most NBFCs set an age limit of 23 to 62 years for salaried individuals under home loan eligibility parameters.
Housing loan interest rate
The applicable home loan interest rate also affects the loan tenor. Usually, this interest rate is revised from time to time, where a longer tenor can significantly increase the interest payment. Comparatively, shorter loan duration decreases the chances of the interest rates being revised to become higher. One can use the housing loan EMI calculator on a lender’s platform to calculate the exact rate of interest.
These few tips can help the housing loan borrower to opt for a suitable tenor that would facilitate ease of repayment.
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