Taking a home loan to finance your housing dreams is a common practice across India.
Loans provide you with the money required to own property in your name.
While some pay the amount upfront, others remove home loans as a means to finance their dreams.
Once one decides to take a home loan, a common query that arises is knowing the tenure of repayment and its commencement date.
Typically, lenders offer a grace period known as the moratorium period before the EMI payments begin. Borrowers are not required to pay any amount in this period.
The moratorium period varies from three to six months and depends on factors such as the borrower’s profile, the lender’s policy, and the loan amount.
Once the moratorium period ends, the lender is required to start paying the EMIs before the due date each month. Each EMI comprises of a part of the principal amount taken as loan in addition to the interest payable on your loan.
While the EMI amount remains unchanged, the composition of the same varies throughout the duration of the loan. During the initial period, the interest payment component is higher and closer to the completion of the loan tenure, the the principal repayment component of your EMI is higher.
EMIs on home loans are affected by the tenure of the loan taken. Simply said, the longer the loan tenure, the lesser the EMI to be paid. A longer duration of a home loan allows you to pay your monthly EMIs without it being a burden on you. Whereas a shorter tenure helps you pay off your loan faster with lesser interest being accrued.
Banks typically offer a loan amortization schedule that helps you analyse and prepare your loan repayment schedule to ensure a seamless loan repayment. So to effectively repay your home loan, borrowers should be aware of their monthly repayment capacity in order to determine an ideal loan tenure.
In conclusion, a housing loan has several benefits and drawbacks, however based on your credit standing capacity one can choose the right loan amount and amoritisation schedule suitable to them. To know more, visit https://www.joyvillehomes.com/ today.
