Home loan- an answer to your financial need Owning a home is like dream come true for any human being. Apart from a secure shelter, it provides you a sense of fulfillment and pride to your family. It gives opportunity to lead a decent life and enjoy stability. Thus home ownership is synonymous with peace and happiness in your life. The easiest way to become an owner of your own house is to take a Home loan; home loan is an amount granted in order to transact in buying a new house/ flat or construct a new house on a piece of land or extend an existing house or renovate an old house to make to it habitable. The amount varies depending on the borrower’s choice, ability to repay, and property value with a long term repayment period ranging up to 15-20 years. This amount is secured against a mortgage of the property for which loan is being taken. Buying /constructing a new house requires a large amount of money which is very difficult to pay from savings outright. Furthermore, the accumulation of the money takes years before one can pursue the transaction. That’s why home loan is the most convenient and prudent way of financing and economical in terms of time. When one acquires home loan the money can be returned through monthly installments known as EMIs.
EMI includes the principal amount and as well as interest amount (at the rate of interest agreed upon) which is paid in monthly installments over the tenor of the loan. Since this is a fixed amount the