Why Home Loans With Longer Tenure Make A Great ChoiceApril 2, 2018
Home loans can undeniably be considered a financial burden for a period of time. Loan applicants can avail the choice to decide how long it takes to pay off by selecting either the long tenure loans or short tenure ones. Of the two, long tenure ones are considered to offer more benefits due to the longer duration of repayment period.
Following are the top 2 advantages of long tenure loans.
1. Higher loan eligibility
When home loan eligibility is determined on the basis of the ability to repay as EMIs, assessment is done on basis of disposable income which can be used for repayment. Short tenure ones will have higher EMIs which may not be repayable and thus decreases the loan eligibility for higher amounts. Long tenure ones with lesser EMIs can be selected for higher loan amounts.
2. Income tax benefits
For a shorter loan tenure, the principal component which includes a tax deduction for a specific limit is higher compared to longer duration ones. So, a significant portion of the repayment will be wasted as it would not be able to claim deduction beyond specific limit.
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