Things You Should Consider for Deciding Upon the Amount of Home Loan EMI That You Can Pay
By Anupama Deshpande | Oct 26, 2018

A home loan is the best option to purchase your dream home. Through home loan you will not only get funds to buy your house at lower interest rate but it will also give you good amount of tax benefits.

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Every month no matter whether you are able to manage your necessary things properly or not, you are bound to pay your EMI. Experts always advise that as a home loan borrower, you should only borrow what they can repay timely and with ease.

Home Loan is a long term liability whose tenure ranges in between 10 years to 30 years. If you borrow home loan from any bank or HFC, you have to pay EMI (Equated Monthly Instalment) regularly. Once your EMI is started, it becomes your responsibility to pay it on time without making any default. If anyone makes default in payment of EMI then it will affect adversely on his/ her creditworthiness and it will be difficult for him/ her to avail any loan in the future.

Therefore, you should be very careful in calculating the amount of EMI that you can pay regularly for long term that too with ease.

Following things you should consider for deciding upon the amount of home loan EMI that you can pay:

If you can use some or all of your savings in hand as down-payment at the time of buying the home, you will need to apply for a lower principal amount and hence you will have to pay less EMI.

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You have to calculate your net monthly income after deducting all your monthly expenses. This figure will show the amount you can actually use for other purposes such as in paying off your EMI, etc.

You must also take the amount of total existing EMIs while deciding upon the home loan EMI amount. EMI is a regular obligation of payment for you for the decided loan duration that is why there is a need to consider all the EMIs that are being paid by you before come to know how much home loan EMI you can pay.

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Age plays an important role while taking a home loan. You will be able to opt for longer tenure as well as large amount of home loan, if you are young.

Longer the tenure, lower the EMI. If you can opt for a longer tenure, this will reduce the EMI amount.

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You also need to pay attention towards your future liabilities that require considerable funds because during those times you may find it difficult to pay higher amount on EMIs.

After consideration of above items well in your calculations of EMI, you can sail safely through difficult times & can make payments of your home loan EMI without any problem. Further, it is advisable to keep your EMI in the range of 30% to 40% of your monthly income.

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