 "Longer home loan tenure reduces EMI but increases interest cost")
- Banks generally offer home loans up to an amount such that the EMI does not exceed 60 per cent of the pay you receive in hand.
- If you have existing liabilities, say another loan, your eligibility goes down further.
- Some banks take into consideration the number of dependants you have. More dependants are equated with lower repayment capacity.
- Choose your EMI and loan tenure carefully. A longer tenure means a lower EMI, and hence more money in hand to meet other expenses. But a longer tenure increases the total interest cost you end up paying on the home loan.
- Avail deduction on principal under Section 80C (limit Rs 150,000) and on interest under Section 24 (Rs 200,000).
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