Taken a Home Loan in Gurgaon? Learn How your EMI is Affected by the Tenor - Make Money Online

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Taken a Home Loan in Gurgaon? Learn How your EMI is Affected by the Tenor

Have you applied for a Home Loan in Gurgaon? If the answer is yes, you should possess some basic knowledge on how the Home Loan tenor affects your monthly EMI. Calculating your EMI is a must whenever you apply online for Home Loan. The minimum salary required for Home Loan in Gurgaon varies from one financial institution to another. In case of Bajaj Finserv, the minimum net salary required in Gurgaon is Rs.45,000 for a minimum property value of Rs.30 lakh. 

The Home Loan tenor does affect the EMI to a large extent. Many people choose a longer loan tenor and what this does is reduce the EMI. This is the biggest effect of the tenure on the EMI. Increasing the Home Loan tenor reduces the EMI you pay every month. While this may be a relief initially, it will lead to you paying more interest on the loan. At the same time, reducing the tenor will increase your monthly EMIs but you will pay lower interest on the Home Loan. 


Most lenders now offer Home Loan tenors between 20 and 30 years. However, the interest paid is quite high in case of long-tenor loans. For example, if a 10-year Home Loan is taken at 10% then the interest paid on the same is approximately 59% of the amount borrowed while this zooms up to a whopping 131% in case the tenor increases to 20 years. Let’s say you have taken a loan for Rs.50 lakh at 10% for 25 years. You will thus pay Rs.86.3 lakh which is equivalent to 172% of the amount borrowed just in interest. 

In many cases, young Home Loan borrowers who have lower salaries may find it tough to borrow a decent amount in case tenors of 8-10 years are selected. These borrowers will automatically pitch for 20-25 year Home Loan tenors in order to afford the monthly EMI. However, the best solution in this regard is to keep increasing the EMI every year with increases in one’s income. It is estimated that if the borrower’s income increases by 8-10% each year, increasing the EMI by even 5% annually will lower the loan tenor by more than 8 years. Increasing the EMI by 10% every year will help you end the loan in just 9 years and 3 months. Even increasing the EMI by 1% every year can lead to reduction in the loan tenor by 3 years. 

Reducing the Home Loan EMI by increasing the tenor may seem the best option since you will have to pay lower EMIs. However, you should keep in mind the interest burden to be paid over so many years. Lowering the tenor may lead to an increase in the EMI but this will help you save more in terms of interest costs. For a rough idea, you can use online Home Loan EMI calculator to check EMI. You should choose wisely, keeping your financial situation in perspective and also examining future goals including weddings, buying a car, higher education expenditure of children and so on.
Taken a Home Loan in Gurgaon? Learn How your EMI is Affected by the Tenor Taken a Home Loan in Gurgaon? Learn How your EMI is Affected by the Tenor Reviewed by Parvesh Bravo on 10:23 PM Rating: 5

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