House loans are known to be a dependable source of financing for homebuyers recently. Various financial organizations provide house loans with varying terms and conditions.
Before availing of a loan, examine the offers from several financial organizations. It would help you save money if you chose an institution that offers the best interest rate.
A reputable lender offers low processing costs, various repayment choices, fast approval, and immediate loan disbursement. You must thoroughly assess your repayment capacity and creditworthiness before deciding on a loan duration. A longer repayment term will allow you to repay the loan amount and avoid high monthly payments.
Consider some of the benefits of a longer-term home loan.
Benefits of a Long-Term Home Loan
Increased Loan Eligibility
Your EMI will be more significant if you take a house loan for a shorter period. Moreover, borrowers with shorter duration will be eligible for less than those with a longer-term. Your credit history, age, and repayment capacity determine your eligibility. Before availing of a loan, you should improve your credit score. It will help you get a bigger loan at a lower interest rate. A more considerable loan amount with a longer-term allows you to select a larger house for your family.
Financial Benefits
Lending institutions offer borrowers benefits under section 24 of the Income Tax Act regarding the interest rate paid on a house loan. Also, borrowers may claim tax benefits on the principal under Section 80C. The highest credit available under this section is Rs 1.5 lakh for loan repayments.
Option for Flexible Repayment
Long-term loans provide flexible repayment choices. Also, top institutions do not impose prepayment penalties. So, the borrower may repay the debt without any additional costs. If you took out a fixed-rate loan, you might still pay it back without penalty. Consider repaying a fraction of your debt each year to get out of debt fast.
Now that you know the benefits of extended tenure, make sure you make the correct option when making your final selection. Before applying, use a home loan eligibility calculator to determine your eligibility, as it reduces rejection chances.
The fundamental qualifying requirements for home loans are as follows:
- Income Criteria: Minimum salary Home Loan Salary Rs.25000.
- Age Limits: Minimum 21 to 60 years max.
- Loan Term: 30 years.
- Loan Amount: Up 75 lakhs.
- Interest Rate: 8.50% – 10.75%.
- Processing Fees: 0.50% of loan amount with a minimum of 10,000 INR.
- Nationality: Indian.
- Prepayment Charges: NIL
Due to many accessible financing alternatives, many borrowers are choosing for a house loan balance transfer.
The Home Loan Balance Transfer process enables borrowers to move their outstanding loan balance from one lender to another. It allows consumers to repay their home loans at a much lower rate than the market rate. It will lower your total borrowing costs and enable you to save a significant amount of money in the long term.
Finally, do not forget to study the loan agreement’s terms and conditions before signing. It will assist you in avoiding any inconveniences in the future. As It allows consumers to repay their home loans.
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