Online home loan offers a UK borrower both short and long UK home loan tenure. Some UK home loan borrowers consciously opt for shorter home loan tenure as they feel that their financial resources are sound enough to cover the huge EMI (Equated Monthly Installment) of shorter online home loan tenure. They foresee a high chance of an UK assignment up their sleeve. One puts a lot of thought into debt repayment planning and personal finance management in order to cover up the loan amount in a short span. The intention behind a short tenure is that shorter the loan tenure, sooner the house will be their own.
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Consider the illustrations below to get an insight into how short term online home loans UK work for you.
-£40,000 home loan costs £6,000 EMI at 10% interest rate for a period of 8 years.
-For the same home loan amount, it would cost £5,200 EMI at 10% interest rate for a period of 10 years.
-For a home loan tenure of 15 years, the EMI to be paid is around £4,200 and £3,200 for 20 years loan tenure accordingly.
The above illustrates that as the loan tenure increases, the burden of EMI reduces. But not everyone can afford the hefty EMIs. A monthly outflow of £6,000 towards an online home loan UK may simply be unaffordable to many. However, few can still pull through. But they will have to suspend money out flow towards other savings and investments in order to meet their online home loan UK repayments. UK financial help strongly advices against borrowing too high as it burdens the borrower and makes repayments stressful.
With short home loan tenure, you end up with a hefty EMI. When the home loan EMI poses a big burden, money outflow towards other instruments like stocks, mutual funds, bonds and FDs terminate. Imagine the situation when the UK borrower is temporarily unemployed. In case the loan tenure is short, the money outstanding increases by leaps and bounds. It becomes so huge that even after finding a job, the borrower may find it difficult to make regular repayments. Defaulting on home loan payments augments the cost of borrowing and brings with it a host of penalties. Further on, if a major portion of your earnings goes towards UK home loans, how would you confront any financial emergency? How do you plan to manage these unpredictable expenses that crop up from time to time?
For a UK home loan borrower who is paying heavily towards home loan, managing finances is a big challenge when debt-to-income ratio hardens, a UK borrower must seek online help and take control over expenses. It beckons for careful spending habits. It is usually stressful to many and hence we advice you to opt for a tenure where the EMI is affordable and not burdensome.
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