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A home loan tenure indicates the timeline during which you must repay your home loan. The tenure can range up to 30 years.

What is the Usual Home Loan Tenure?

Typically, a home loan’s minimum tenure is about 2 years, while the maximum tenure can extend up to 30 years. Remember a home loan’s maximum tenure is based on your retirement age. The home loan repayment tenure is influenced by various factors, some of which include the age, principal amount, interest rate, and monthly income.

Long-Term vs Short-Term Home Loan Tenure

Here are the key differentiating points between a long-term home loan repayment tenure and a short-term home loan repayment tenure.

Differentiating Points

Long-term Loan Tenures

Short-term Loan Tenures

Tenure

Long-term loan repayment tenures are usually above 5 years. The maximum repayment tenure can extend to 30 years

Short-term loan repayment tenures are usually under 5 years

Mortgage Period

Your house will be mortgaged for an extended duration as the ownership of the property will not be transferred to your name until the loan amount is completely repaid

Your house will be mortgaged for a shorter duration

Interest Rate

Lenders typically charge reduced interest rates since long-term home loans are spaced out over several years

To compensate for the smaller loan period, lenders charge a higher rate of interest

EMI Amount

The EMI payments may be comparatively lower due to the extended repayment tenure. However, the overall interest outgo can be higher

As short-term home loans are managed across a shorter time frame, the EMI amount tends to be higher. However, the total interest outgo will be lower.

Disbursement Time

Lenders take more time to disburse the amount as the principal amount of long-term home loans is generally very high. They use this time to evaluate the borrower’s creditworthiness and repayment capability.

A short-term home loan can be disbursed quickly, as the amount is generally lower and involves minimal paperwork.

Long-term vs Short-term Home Loan Tenure: Which One is Better

Short and long tenures have their own set of benefits. You should pick one based on your principal amount, interest rate, and monthly repayment capacity. 

 

Here are some benefits of a short-term home loan tenure:

  • Enhanced flexibility to choose the loan duration and repayment schedule

  • Reduced overall borrowing costs due to lesser interest outgo

  • Higher potential for savings, if you prepay the loan during the early parts of the tenure

 

Here are some advantages you get when you choose a long-term home loan tenure:

  • Lower interest rates and monthly EMIs due to extended home loan tenure

  • Greater tax benefits under Section 24 of the IT Act on the interest paid towards your home loan

  • Improved Credit Score due to consistent EMI payments throughout the home loan tenure

Factors to Consider Before Choosing a Home Loan Tenure

Some of the factors you must consider while choosing an ideal repayment tenure are as follows:

1. Age

Your age is a crucial factor when choosing a home loan tenure. You may opt for a longer tenure if you are young since you have more working years ahead. On the other hand, you may consider a shorter tenure if you want to clear your dues before retirement.

2. Required Amount

The loan amount you borrow does influence your repayment window. If you opt for a higher loan amount, you may need a longer tenure to pay your EMIs comfortably. Conversely, choosing a shorter tenure is ideal if you have opted for a lower loan amount.

3. Interest Rate

If you have opted for a long-term loan, lenders might charge a lower interest rate since your loan is spaced out over a longer period. On the other hand, lenders charge a higher rate to compensate for the shorter period and the reduced interest earned.

4. Home Loan Type

Different types of home loans have varied impacts on your interest rates and monthly instalments. Hence, you must consider the type of home loan and then choose the right home loan tenure. This also affects how you structure the repayment of the loan.

5. Monthly Income

Your monthly income plays an important role in determining your repayment capacity. In case you have a higher income, you can choose a shorter tenure as you can manage higher monthly instalments. On the contrary, with a lower income, choosing a longer tenure is better as it reduces the risk of default.

6. Purpose

Another factor you must consider when choosing a loan tenure is the reason for taking the loan. For example, the tenure you choose for a home that will serve as your primary residence will differ from a property you purchase as an investment.

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Tips to Choose the Best Home Loan Tenure

Here are some tips to help you choose the best home loan tenure for smooth loan repayment.

  • Assessing your financial situation is essential while choosing a home loan tenure. If your finances aren’t stable, you risk defaulting on your payments and incurring hefty penalties. 

  • Check your credit score and report since they can influence the loan terms that you can get. With a good credit score, you can negotiate with the lender for a shorter or longer tenure, as per your preference.

  • Choosing a realistic loan amount is essential since they influence the tenure of your loan. 

  • You must keep your long-term goals in mind when deciding on the loan tenure. Aligning the loan tenure with your life goals is essential to handling repayment smoothly.


Choosing the right tenure for your house loan is crucial, as it can help you save a lot of money in one way or the other. To see which tenure would be right, you can use the home loan EMI calculator on Bajaj Markets.

Home Loan Tenure Options Offered by Leading Financial Institutions

Home Loan Providers

Maximum Loan Tenure

Bajaj Housing Finance Limited

40 Years

Home First Finance Company

20 Years

ICICI Bank

30 Years

India Shelter

20 Years

Kotak Mahindra Bank

20 Years 

LIC Housing Finance

30 Years

PNB Housing Finance Limited

30 Years

Shriram Housing Finance

25 years

Shubham Housing Finance

25 Years

Union Bank of India

30 Years

Disclaimer: The tenure options can vary at the discretion of the lending institution. Kindly check with the lender before applying for a home loan.

FAQs on Home Loan Tenure

You can choose a maximum home loan tenure of up to 30 years.

 

Yes, most lenders offer you the option of changing your home loan tenure based on your financial situation and creditworthiness. You must contact your lender and request to change the tenure. 

 

Yes, most home loan lenders allow you to prepay your loan before the original tenure. However, you may need to pay foreclosure or prepayment charges. If you choose to repay your loan earlier, you can save on interest and lower your tenure.

You may get lower interest rates if you choose to take a home loan with a longer tenure. Additionally, another advantage is that your EMI amount is lower as well. 

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