Don't Decide Home Loan Tenure Before Watching This - Subodh gupta

CAUTION: I'm just advocating that "Initial Loan term" at the time of applying for home loan should be Longer as it has many advantages. "Actual Loan term" may be brought down by you by making prepayments (No Penalty or restrictions on Home Loan Prepayments). I don't mean that you should run the loan for longer period. It is a matter of common sense that if you keep on running loan for 100 years then you will have to pay interest for 100 years to the bank which will obviously be much higher had you closed the loan in 10 years. I'm repeating once again (as many viewers still misunderstand my point of view) that I am just asking in this video to apply for home loan for the maximum possible tenure initially and then reduce the tenure by making prepayments as per your convenience or entirely foreclose the loan as per your sweet comfort because there is no Pre-payment or foreclosure penalty.

Kindly also note that you pay interest to the bank only on "Monthly Outstanding Principal" . It has to do nothing with Total loan tenure or Applied loan Tenure. Whether you take loan for 5 years or 10 years or 15 years or 20 years or 30 years, your bank will charge simple interest from you only for one month on your "Outstanding Principle Amount". Just because Loan amount is higher in the beginning, you pay more money as interest. Every passing month, loan amount keeps going down, so the interest portion in the EMI also keeps going down. It is as simple as that.

I also recommend to watch my another Two videos which will help you to understand more:

1) The Big Confusion of Home Loan Borrowers: Prepayment or Investment ? https://www.youtube.com/watch?v=b4gq3QZL-mI&t=348s
2) How Interest Portion is determined in the EMI ? https://www.youtube.com/watch?v=5Tgr5eTIM14&t=3s

Subodh gupta. {B.Com. MBA. (LL.B)*, IRDAI Certified, AMFI Certified. 22 years of experience in Finance Industry}
Founder : www.SastaLoanBazaar.com (बात सिर्फ़ आपके Interest की )

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