Home Loan Tenures don’t have to be Long
What is Home Loan Tenure?
The joy of living in a house of your own is one that everyone wants to experience which is why today, one of the most common loans that lending institutes offer is the Home Loan. The Home Loan offered by the bank or a lender is usually given on the basis of a few creiteria such as the salary of the borrower, the property value, and the rate of interest on the principle amount. This amount, usually given at 80% of the total property value, with the interest is paid to the bank usually through Easy Monthly Instalments or EMIs. Usually the process involves a minimum Home Loan tenure of 5 or 10 years depending on the principal amount. Sometimes it can go up to 15 or even a maximum Home Loan tenure of 30 years. That is a lifetime worth of EMIs. This time period or lifetime of a Home Loan wherein the borrower returns the money is called tenure.
Why Spend More Money?
If the interest rate is higher then your EMI naturally becomes a bigger amount. This means more money is spent in paying off the Home Loan. In order to reduce the total amount of money spent on repayment you can look into reducing the tenure of your EMIs.
Ways to Reduce Your Home Loan Tenure and EMI:
Prepayment of the Home Loan:
One of the ways to reduce your Home Loan EMI and tenure is through the process of “pre-payment’. If you get a raise or bonus then you can pay back the entire loan or a huge part of the loan to the bank. This automatically reduces the principal amount to be paid thereby reducing the Home Loan tenure and subsequently the EMI.
Higher EMI amounts:
Another way to ensure early completion of your Home Loan is by increasing the amount of EMI you pay to the lender. This may not be the ideal solution, but paying a higher EMI means that it is to be paid for a shorter period of time.
Frequency of EMIs:
Take a scheme where the frequency of the EMIs is more. A good example of this is where you pay a monthly EMI for 5 years rather than a quarterly EMI for 15 years. Doing so will ensure that your Home Loan tenure is not very long.
Lower Interest Rates:
If you are a long standing customer of the bank or the lender, it is possible to bargain with them for a lower interest rate. This helps in lowering the tenure because the lower the Home Loan interest rate, This helps in lowering the tenure because the lower the interest rate, the lower the EMI resulting in a quick repayment of your Home Loan.
These are few of the ways to reduce the Home Loan tenure as much as possible. Why not reduce the financial strain on you and ensure mental peace for yourself and your family? Once your Home Loan is paid, it is truly a joy to call your house your own! Therefore, do consider rearranging your finances to take advantage of the various ways to reduce EMI and loan tenure.