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Home Loan- Are you going to take a home loan, then know about its disadvantages and advantages


Every person has a dream of having a house of his own, but looking at today's scenario and expenses, it seems that this dream remains only a dream, in such a situation, many think of taking a home loan to build a house, but taking a home loan is a big financial responsibility, and it is important to keep some important things in mind before taking it. Choosing the tenure of the home loan, interest rates, EMI and cash flow are some of the things that should be taken into account. Let's know about them

Home loan tenure: long or short?

While choosing the tenure of the home loan, it is important to note that both the terms have their advantages and disadvantages. Long term loan:

Long-term home loans are not always harmful. For example, if you repay a loan of Rs 50 lakh in 25 years, you will have to pay interest of about Rs 75.87 lakh. Your monthly EMI will be lower during this period, which can reduce cash flow problems.

Short-term loan:

Short-term home loans save on interest costs, making it financially beneficial. For example, if you repay a loan of Rs 50 lakh in 15 years, the interest is only Rs 41.28 lakh. But, this option has a higher monthly EMI, which can lead to cash flow problems. EMI and monthly income

The ratio of monthly income and EMI:

According to experts, an EMI of up to 40% of monthly income is considered appropriate. If you opt for a higher EMI, it can create inflation flow problems.

Cash flow problems:

If a person loses a job or has a sudden major expense, a higher EMI can be difficult to manage. Therefore, one should choose the EMI keeping in mind their monthly budget.