How do I manage my Home loan better

How Does Home Loan Tenure Work?

Tenure of a home loan is the total period being arrived for completely repaying the principal & interest. Typical Home Loan tenure range between 1 year & 25 years.

Tenure is inversely proportional to the EMI; Higher the tenure – lower the EMI and Vice versa

Tenure is directly proportional to the total Interest paid in a loan; Higher the tenure – higher the Interest payable

How to choose a right tenure:

Longer tenures give relief on monthly cash outflows but a higher overall interest amount payable. It is wise to choose a tenure that perfectly balance the monthly payable vis-a-vis total interest payable.

It’s wise to measure & assess current monthly income level, project a conservative/realistic rise in monthly income in 2-3 future time

horizon and basis that decide on a balanced tenure as afore-mentioned, which gives the affordable EMI outflow post the repayment eventually starting.

Below graph depicts the relationship between tenure and EMI/Interest payable of a loan

how home loan tenure work 1
how home loan tenure work 2

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