Are Long-Term Home Loans Better Than Short Term Loans

Age- The age of the applicant is considered by the lender while sanctioning the
loan. A borrower cannot run a loan repayment process beyond the age of 60.
This means that the loan tenure of a person highly depends on the age of the
borrower. Let's say a person has applied for a loan at the age of 45. So the
longest tenure he can avail is 15 years.
Income- The income of a person is checked by the lender to gauge the
repayment capacity. The monthly outgo of a person in loan repayment
(including all loans) should not be more than 50% of his net monthly income.
So sometimes, the lender urges the borrower to opt for a longer tenure so that
the EMI amount comes down and the loan can be sanctioned.
The rate of interest- Before opting a tenure, one must consider the rate of
interest too. A rate of interest on a home loan can be of two types i.e. Fixed
interest rate & floating interest rate. A fixed interest rate will remain same till
the end of the tenure but a floating interest rate may change as it is related to the
market fluctuations and the market trends. So selecting any tenure, one must
examine the kind of interest rate and make the decision.
The Concluding Line
Buying a home or availing a home loan is one of the most important decisions
of life. Any home loan borrower must go through the Home Loan Procedure
meticulously so that the loan availing and servicing the same becomes
effortless. There is always a lot of discussion and brainstorming happens prior
to a home loan and the home loan tenure and the home loan interest rate are the
major ones. Taking informed decisions are always best as this will save one
from future surprises and shocks regarding the loan.