Pros And Cons Of Availing Of A Home Loan - Loan Trivia


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Wednesday 28 September 2022

Pros And Cons Of Availing Of A Home Loan


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Congratulations on your decision if you have decided to avail home loan and get enough amounts to buy or build your dream abode. 

However, when you decide to avail home loans, they come with their share of pros and cons. 

Let’s check all in this post!

Pros of a home loan 

  1. A higher amount made possible 

When you apply for home loan, you can get a significant amount as per your eligibility and other factors. You can use the loan amount to buy or construct a home of your desire and fulfil your wish without availing of another debt. 

  1. Comes with lower interest rate charges 

Applying for a home loan also comes with a lower interest rate charge because it is a secured debt.  It means you can save on housing loan interest charges. 

  1. Improves your CIBIL score

Repaying your home loan over a longer tenor means managing lower EMIs. And doing that means you can keep your credit score in good shape. It is one of the best factors to get your next loan approval at a lower rate. 

Cons of a home loan 

  1. Long-term commitment 

A home loan is a long-term commitment which means your income is affected for a long time. Hence, you have no bandwidth to devote to other expenses in your life. 

  1. Higher loan amount means bigger interest charges 

You also have to manage to pay more interest charges if you avail of a large amount. 

  1. A longer tenor means paying more interest amount 

An extended tenor may reduce your EMI amount but increase the overall interest amount adding to the overall cost. 

You are now aware of the basic advantages and disadvantages of when you avail home loans. 

Thus, you can accordingly consider these points and decide your next course of action. 

Read More: Make Better Financial Decisions with a Home Loan Calculator    

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