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Choose Between Short Term and Long Term Home Loan?

Short Term or Long Term Home Loan- Which Is Best?

4 Things to Know Before You Consider Home LoanDeciding to purchase a home is a big financial decision in life. You must answer many questions like is it a right time to buy a home? Should I go for a home loan? If yes, what is the loan amount that can be taken? And finally, how to fix the tenure of the home loan to benefit more. Keep reading to know the factors you should consider to decide the tenure of your housing loan and benefit better.


Your income is the first factor that you should look in when you consider housing loan. If you have a good paying job and you know there is surplus money left in your account every month after addressing all the expenses, you should think of considering short term for housing finance as it could save a lot of money to your pocket in the form of interest.


Age is the second important factor that should be considered while deciding the tenure of the house loan. If you are planning to take a housing finance at early stages of your career, you can go by choosing the long term because you are yet to earn for more period. On the contrary, if you are in your 40’s or 50’s, choosing the short tenure is advisable and even banks offer the loan till retirement age.

Rate of interest

The rate of interest is another factor that you should choose between short term and long term loan tenure. The type of interest you choose is the key factor for deciding the loan tenure. Floating interest and fixed interest rate are two types of interest available to home loan seekers fixed interest rate remain same throughout the tenure whereas floating interest rate changes per the market fluctuations.

Choose between short term and long term loan tenure

After considering all the above factors, you should choose between short term and long term loan tenures. If you want to pay off the housing finance quickly and relieve yourself from the burden of paying EMIs, choose to go with short term loan tenure so that you will save a good deal of money in the form of interest.  You should be ready to pay off the loan in high instalments when you pick a short term for the home loan.

Long term should be your option for house loan if your income levels are low and you don’t want to strain your cash flows to pay off the loan. Though you pay a large amount in the form of interest rates, your mind will rest in peace as your EMIs for the loan will be low.


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