![\"Book](\"https:\/\/www.pranavconstructions.com\/blog\/wp-content\/uploads\/2021\/12\/PCPL-Ad-3.jpg\")
<\/a><\/figure><\/div>\n\n\n\nTwo\nTypes of Loans<\/strong><\/p>\n\n\n\n Financial\ninstitutions and banks provide two types of home loans, i.e.,\nshort-term and long-term home loans. Eventually, it\u2019s your decision\nwhether you want to opt for short-term or long-term home loans. A\nborrower needs to be careful when selecting a home loan. To help you\nout, here is a comparative analysis of a short-term and long-term\nloan.<\/p>\n\n\n\n Short\nTerm vs Long-term Home Loan<\/strong><\/p>\n\n\n\n Arriving\nAt a Decision<\/strong><\/p>\n\n\n\n Still,\nconfused? Don\u2019t know if you need a short-term loan or a long-term\nloan? To help you reach a decision, here are some pointers that must\nbe looked at. They are:<\/p>\n\n\n\n Interest\nRate<\/strong><\/p>\n\n\n\n Against\nyour home loan, the interest rate is applicable. The interest rate\ngreatly affects the decision of the borrower. In contrast to\nlong-term home loans, the interest rate for short-term home loans is\nlow. While applying for a home loan, you should check whether the\ninterest is a fixed one or floating. For fixed the interest rate\nstays the same regardless of the market rate; whereas for floating\ninterest rate it keeps changing with market trends.<\/p>\n\n\n\n Interest\nCost<\/strong><\/p>\n\n\n\n The\nmajor consequence of home loan tenure is on the interest cost that\nneeds to be incurred. If the repayment tenure is long, the interest\ncost gets high. Similarly, if the repayment tenure is short, the\ninterest cost remains low. After all, the cost depends on the\napplicable interest rate.<\/p>\n\n\n\n Mortgage\nof Property<\/strong><\/p>\n\n\n\n A\nhome loan is a secured offering. Hence, the property would be\nmortgaged until the total loan amount is repaid. Longer the tenure,\nlonger the property would be mortgaged with the bank.<\/p>\n\n\n\n EMI\nAmount<\/strong><\/p>\n\n\n\n Home\nloans need to be repaid in installments. A borrower should opt for an\nEMI option that they feel comfortable. For a short-term home loan,\nremain prepared to pay a very high EMI. But for long- term loans,\nremain prepared to pay a low EMI. One should go for a short tenure,\nprovided, they are comfortable with the EMI amount.<\/p>\n\n\n\n Before\nopting for a long-term or short term home loan, the borrower needs to\ntake a look into the terms and conditions associated with the loan.\nFor instance, the time by which the entire amount must be repaid is\nmentioned. However, depending on the financial institution you have\nselected, the maximum and minimum tenure of repayment vary. Hence, a\nborrower, depending on their ability to repay should opt for the loan\ntenure.<\/p>\n","protected":false},"excerpt":{"rendered":" Planning to buy your dream home is a big move. You need to be financially sound to be shortlisted for a home loan. Banks and financial institutions apart from assessing the financial condition of the borrower, also take into account some other parameters, such as the age of the borrower, loan tenure, objectives, and so on.<\/p>\n Two Financial Short Short-term Arriving Still, Interest Against Interest The Mortgage A EMI Home Before
\nTypes of Loans<\/p>\n
\ninstitutions and banks provide two types of home loans, i.e.,
\nshort-term and long-term home loans. Eventually, it\u2019s your decision
\nwhether you want to opt for short-term or long-term home loans. A
\nborrower needs to be careful when selecting a home loan. To help you
\nout, here is a comparative analysis of a short-term and long-term
\nloan.<\/p>\n
\nTerm vs Long-term Home Loan<\/p>\n
\n\tloans last for up to 5 years; whereas long term loans range from
\n\t5-30 years and even more. People should opt for short-term loans if
\n\tthey are financially strong enough to repay the amount within a
\n\tshort time. Similarly, one should opt for long-term loans if they
\n\twant to increase the home loan eligibility criteria.
\n\tShort
\n\tterm loans come with a low-interest rate; whereas long-term home
\n\tloans come with a high-interest rate.
\n\tEMIs
\n\tassociated with short-term loans are always high; however, it\u2019s
\n\tnot the case with long-term loans. EMIs are low with long-term
\n\tloans.<\/p>\n
\nAt a Decision<\/p>\n
\nconfused? Don\u2019t know if you need a short-term loan or a long-term
\nloan? To help you reach a decision, here are some pointers that must
\nbe looked at. They are:<\/p>\n
\nRate<\/p>\n
\nyour home loan, the interest rate is applicable. The interest rate
\ngreatly affects the decision of the borrower. In contrast to
\nlong-term home loans, the interest rate for short-term home loans is
\nlow. While applying for a home loan, you should check whether the
\ninterest is a fixed one or floating. For fixed the interest rate
\nstays the same regardless of the market rate; whereas for floating
\ninterest rate it keeps changing with market trends.<\/p>\n
\nCost<\/p>\n
\nmajor consequence of home loan tenure is on the interest cost that
\nneeds to be incurred. If the repayment tenure is long, the interest
\ncost gets high. Similarly, if the repayment tenure is short, the
\ninterest cost remains low. After all, the cost depends on the
\napplicable interest rate.<\/p>\n
\nof Property<\/p>\n
\nhome loan is a secured offering. Hence, the property would be
\nmortgaged until the total loan amount is repaid. Longer the tenure,
\nlonger the property would be mortgaged with the bank.<\/p>\n
\nAmount<\/p>\n
\nloans need to be repaid in installments. A borrower should opt for an
\nEMI option that they feel comfortable. For a short-term home loan,
\nremain prepared to pay a very high EMI. But for long- term loans,
\nremain prepared to pay a low EMI. One should go for a short tenure,
\nprovided, they are comfortable with the EMI amount.<\/p>\n
\nopting for a long-term or short term home loan, the borrower needs to
\ntake a look into the terms and conditions associated with the loan.
\nFor instance, the time by which the entire amount must be repaid is
\nmentioned. However, depending on the financial institution you have
\nselected, the maximum and minimum tenure of repayment vary. Hence, a
\nborrower, depending on their ability to repay should opt for the loan
\ntenure.<\/p>\n","protected":false},"author":1,"featured_media":1827,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[237,31],"tags":[84,85,87,48,89,86],"yoast_head":"\n