You want to buy a home in India? Sure. It would cost you quite a lot of money in lakhs and also might stretch to crores depending on the property area. You can buy a house with your savings but most of the time it is not possible to do so. So you can take help from a Bank/NBFC to fund the house purchase.
Banks will pay around 80% of the loan amount whereas you will have to pay around 20% of the purchase amount as down payment. While this is just the first step in the home loan process, the main one lies in choosing the tenure of the loan.
Why is choosing loan tenure very important?
The mantra here is, longer the loan tenure, smaller would be your monthly EMI Amount. We can explain this with an example below of Mr. Kumar, a 30 year old businessman who purchased a flat in Andheri East, Mumbai via taking a home loan worth 30 lakhs @ 8.50%. This is how much he would have to pay monthly with different tenures;
15 years – 29,542 per month
20 years – 26035 per month
25 years – 24157 per month
30 years – 23,067 per month
As you can see, until he reaches his retirement age of 60, he can repay the home loan in 30 years at a lower cost than what he would have to pay at 15 years.
Is there home loan tenure available for more than 30 years?
Yes. SBI allows loan tenure up to 40 years. This means you can repay this loan even beyond your retirement age. Apart from that there is a new offering in the market in the form of a partnership between LIC Housing Finance (LICHFL) and India Mortgage Guarantee Corporation.
What is this new scheme?
Under this new home loan product, LICHFL can allow home loan tenures to customers that go up to the customer reaching 75 years of age. So, the monthly EMI burden will reduce even further (as seen above in Mr. Kumar’s case). LICHFL through this scheme supports the vision of “Housing for all by 2022” by the government.
How can I get this loan?
You can apply for this loan the same way you apply for other home loans i.e. by checking your eligibility with Ruloans. Please note that profiles which have a good credit score and lesser errors in their credit report will definitely get higher chances of getting their home loan application approved. Apply via Ruloans and get the best deal available on home loans.
