Home Loan tenure refers to the duration within which the borrower agrees to repay the loan amount in full, including both the principal amount and the interest accrued atop it. Typically, Home Loan allow for a long repayment tenure, often stretching up to 32 years, allowing borrowers ample time to repay the loan amount.
A change in your tenure directly affects your interest outflow as well as your overall EMI amount. Thus, it is imperative you choose a Home Loan tenure that is most suited to your financial standing and future goals.
The ideal Home Loan tenure will enable you to become debt free quickly while allowing financial room for unforeseen expenses.
The maximum tenure for a housing loan is the period of time for which you and your lender agree on the repayment of the loan. This is repaid in EMIs (Equated Monthly Instalments) over a period of up to 32 years. This is the case if you apply for the loan at a young age and repay it before the maximum age limit to avail of a Home Loan.
There is no one ideal tenure that fits all Home Loan cases. Every borrower’s needs, suitability, and capacity differ, and so, the ideal tenure varies from person to person. Borrowers are, hence, advised to plan for the future and calculate a repayment period that takes various factors into account. Some of these are:
- The Loan Amount: The Home Loan amount you seek has a considerable impact on the duration it may take to finally close the obligation. If you want a sizeable sanction, it may take you longer the principal amount and the interest component; especially if you would like to avoid steep EMIs.
- Repayment Capacity: While calculating your repayment tenure, you should also account for your monetary obligations and duties, as your repayment capacity may already be divided. In this case, choosing the right tenure will help you adjust your EMI amount in a way that suits your repayment capabilities.
- Age: Age plays an important role when deciding the right Home Loan tenure. The available repayment periods may be shorter for older applicants or those nearing retirement. So, it is a good idea to plan your loan amount and tenure accordingly.
However, older individuals can still improve their chances of getting better Home Loan terms if they include a financial co-applicant with a good credit score or a guarantor in their application.
| Point of Difference | Long-term Home Loan | Short-term Home Loan |
|---|---|---|
| Tenure | Usually, a Home Loan is termed a long-term loan when its repayment tenure exceeds 5 years and can stretch up to 32 years. | Home Loan with a repayment tenure of less than 5 years. |
| Interest Rate | The interest rate is usually lower due to lower risks of the lender. | The interest rate is usually higher due to the lender’s risks being higher. |
| EMI | The EMI amount is lower, making these loans more feasible. However, you spend more on interest payment. | The EMI amount is higher but the total interest outgo is lower. |
Selecting the right Home Loan tenure is essential for comfortable repayment and long-term financial planning. Here are four important factors to consider:
Loan Amount: A higher loan amount often calls for a longer repayment tenure to ensure that EMIs remain feasible. Opting for a long tenure can help you manage large loan amounts more easily.
EMI: If you have a low EMI, your loan tenure will be high. On the contrary, if you are willing to shell out the maximum EMI that you are allowed to, you can reduce your tenure by at least a few months.
Age: Home Loan tenures can be as long as 32 years. But to avail maximum benefits of it, your age should be well within the age limit. For instance, if you are 30, you may qualify for the maximum tenure. This is because you have more working years ahead. However, if you're 40, the available tenure may be shorter. Lenders consider the number of years left until retirement when deciding the tenure.
Rate of Interest: Interest rates directly affect your EMI and, in turn, your loan tenure. A lower rate of interest results in smaller EMIs, which may allow you to repay the loan more quickly. On the other hand, higher rates might necessitate a longer tenure to keep EMIs manageable.
Home Loan Tenure can be changed voluntarily anytime during the course of the loan. You can visit the nearest branch of or contact the customer care number/sales representative and give a request for the same.
The concerned official will go through your loan statement and latest income statements before allowing you to change the tenure.
The Home Loan EMI Calculator is an apt tool for such dilemmas. Using this online tool is easy and free of cost – allowing you the foresight to plan your Home Loan repayment realistically. Here is how to best use the tool to your advantage:
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Use the slider to accurately select your desired Home Loan amount.
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Use the next slider to indicate your preferred Home Loan repayment tenure.
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Use the third slider to select the current Home Loan interest rate.
The calculator then projects your possible Home Loan EMI calculation, your total Home Loan payable, along with the principal and interest break-up. This forecast helps you assess the EMI amount, calculated considering your preferred repayment tenure to see if it fits your budget or not. You can use the tool as many times as you would like, till you reach a repayment tenure that satisfies all your Home Loan needs.
*Terms and conditions apply.
Frequently Asked Questions
At Bajaj Housing Finance, the maximum Home Loan tenure is up to 32 years.
The ideal Home Loan tenure is that where you can pay comfortably and also save on excess interest. There is no specific tenure that is common for all and may depend on the borrower.
Yes, Home Loans with longer tenure help the borrower to repay with ease – although they may have to shell out excess funds as interest.
The tenure does not have a direct impact on your credit score. In an indirect way, a longer tenure can possibly only improve your credit score considering you get a comfortable time to repay your loan thereby minimising your possibility of defaulting.
Your Home Loan tenure automatically increases when there is a rise in the interest rate. You can also reduce your tenure by using the facility of prepayment.
Reducing the EMI will make your repayment easier by spacing out the amount into a greater number of instalments. However, it will also increase the overall outgo of your interest payment.
On the other hand, if you reduce your tenure, your EMIs will increase, and so will your monthly obligations. However, your total interest outgo will decrease.
