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Why to keep the repayment shorter

We look for different options before finalizing a home. After all, it’s a big decision for the whole life. Not to regret in future there are different things that will look into the property and ask about the feedback for the same from the local people, owner and maybe the proposed lender. Before buying the property there are many things that we have to decide. One of them is the home loan. If there is any financial crunch or maybe even if we have the complete amount to buy the whole property still we look forward to take a home loan.

Read: Borrow a home loan even if you don’t need it.

Home loans are always seen as a long term expenditure or as an investment, depending on the flow of the money you have. Many of us do not have any other option instead of borrowing a loan to buy a home and others do it by simply saving apart from their income and build an asset. If you think as a layman find a home loan process as a long, lengthy and hazardous process with a lot of complications in it. But if we look at the positive sides of the same you will find that there are many benefits too. Yes, there might be many questions banging in your head when you have the complete amount as a surplus to buy the property.

Though, the tenor, home loan rate of interest and other terms and conditions depend on your credibility. Therefore, we suggest you keep the loan repayment tenor as short as possible. When you can manage a shorter tenor than why to stretch it for 30 years? However, the amount of equated monthly installment (EMI) would be much lower in 30-year tenure than that of 25-year tenure, but still you cannot turn your eyes away from the benefits of the shorter loan tenure.

Benefits of shorter tenor

There are many questions that come up to our mind. These questions give many reasons to think about the future aspects of the debt that we are taking. The following questions give us a brief of what an Indian mindset goes through before borrowing a home loan.

  • Is it worth staying under debt for a longer period?
  • What if you need to take another loan for your children’s wedding in the future?
  • Who will pay your home loan after a certain age because at the time of borrowing the loan, you are a young man but with the growing age the repayment of the home loan would not be your only priority.
  • Why not finish the present one and buy another home?
  • Do you not want to avail of a better return on your investment?

You will never be satisfied with any of the statements given by the Bank/ NBFC loan officer until you get the answers to the above questions. You will feel burdened as long as you have to pay regular monthly installments. You will always find yourself under tremendous emotional pressure unless you repay the loan completely. The mindset if Indian people is different unlike the people in the West where the entire economy is credit-based and people do not consider debts as a burden and the Indians do not take it so lightly. If any of the Indians is under debt, many of us would start greying prematurely or losing hair over it and start getting into the gang of greys. After a certain age, we will try to avoid taking any kind of new risks, even if they are expected to yield positive results in the future. Because we are under debt, we will never take or suggest anyone take such a step.

The early you try to get rid of the debt burden, the better for the well-being of you and your family. It will be good for you because you do not to be under too much pressure to repay your loan and for your family to they will not be under pressure of your debt burden. Due to any bad circumstances in case you are incapable to pay your EMIs, then your co-applicant or other family members will be liable to repay your loan amount. This might lead them in a lot of financial trouble and also they might think about why you took that loan. Though, it was for their security only.


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