What should I consider when deciding between a 15-year or 30-year home loan term?
Home Loan :
A home loan is a very important accessory and it has many benefits. It increases the investment ability of the borrower and is also helpful in increasing the credit score. There are many banks and housing finance companies that provide attractive home loan schemes with good EMIs and convenient home loan term options. If you want to buy a home then a home loan can be a game changer for you. It can help you in getting ownership of the best property with respect to your income and savings. Deciding the right home loan term can be a bit confusing and it depends on certain factors.
Pros and Cons of a 15-year term :
Pros :
- In a short-term home loan, The borrower has to pay lower interest rates in the longer run. It will save the borrower a lot of money.
- You will get ownership of the concerned property in a shorter period of time. The sooner you will pay off the loan, The faster you will get the ownership.
Cons :
The monthly EMIs will be much higher than a home loan with a longer term. The higher EMIs may affect your lifestyle and any financial instability might make you a defaulter so keep a check of your finances while applying for such a home loan.
Pros and Cons of a 30-year term :
Pros :
- The monthly EMIs in the case of a long-term loan is lower than a short-term home loan. This can be very helpful for many borrowers because of the lower EMIs. The loan repayment will be easy even in the case of financial instability.
- The lower EMIs will also make it easier for the borrower to maintain a good credit score.
Cons :
In the longer run, You will end up paying a much higher interest than a home loan with a shorter home loan term. This will cost you a lot.
Conclusion :
A home loan is very helpful and choosing between a long-term or a short-term loan depends on your income, financial stability, loan amount, etc. The home loan term is a very important factor and if you have sufficient funds to manage a short-term loan then you should apply for a 15-year home loan. If you don’t have sufficient funds to manage a higher EMI then you can apply for a 30-year home loan. Both loans will help you in getting ownership of your dream home within their respective time periods.
Most of borrowers are confused about the home loan term but with the help of the above-mentioned details, One can decide on the right home loan term. There are also other options like loan refinancing and loan restructuring. A borrower with a good credit score can take benefit from such options. There are also home loan schemes that provide flexible interest rates and it can be very helpful for many borrowers. If you want to buy a home then a home loan is a very important accessory to ensure maximum benefits.
