There are many times when you have to borrow money from banks or from some other financial institutions to fulfil your financial requirements. It is not an easy task to do so. Banks and other financial companies keep bombing their customers regarding attractive deals and offers for loans through emails and SMS. You can even apply on spotloan to meet your urgent financial needs. It comprises of least amount of paperwork and documentation. You should always get your loan disbursed from a reputed financial institution so that you can repay it back as per your convenience.
What things should you consider?
You must consider your loan to income ratio. It should not be greater than 40% in any case or you will be having a hard time repaying your EMI’s over a long period of time. It is better to maintain your loan to income ratio within 25%. So don’t borrow more than you can pay back. This is the first smartest decision that you can take by evaluating your present financial condition. Also, your EMIs should not account more than 10% of your monthly income as per some of the experts. Don’t take a loan just because it is available easily through the online platform. Also try to keep your tenure as less as possible so as to finish up your loan in the least amount of time or else you will wind up paying much more money than you have taken as a loan to meet your financial requirement.
Maximum home loan tenure is about 30 years. And the longer your tenure, the shorter is your EMI. However, it is better to take a loan for shorter tenure as it saves a lot of money on your loan. Your interest will be very high if your tenure is a number of years. Approximately for a loan for period of 10 years you have to pay interest of about 57% of the borrowed amount. That means you have to pay 128% of the principle amount of your loan if it is for a period of 20 years.
Apart from all this, make sure that your repayments are regular and timely to avoid the unnecessary effect on your credit profile that can affect your future loan ventures. These are some of the tips that can help you in your mind wrenching process of taking a loan to meet your financial requirement.