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IS 30 YEARS HOME LOAN PLAN IS THE RIGHT CHOICE FOR YOU?
30 years loan plan is a well known and successful loan scheme which has been launched by the banks since many years. It has been the first choice of many people who plan to get loan.30 year loan plan is an industry standard and is highly trusted by the people. As its first look it is very appealing, as you get a long time to repay the loan. But the issue is to decide whether it is good for you or not.
So first of all let us see what 30 years home plan actually is? 30 year home loan plan is probably the highly demanded mortgage due to its repay time period. The reason of popularity is that there are long monthly installments and interest rate, are to be paid in long time period of 30 years which appeals the clients towards it. But when some one clearly sees the details of the mortgage he comes to know that there are not only the ups but also downs as well in the scheme.
Total payments include, loan and the interest rate, are spread over an approximately 30 years time period. You have easy monthly installments which you keep on paying every month for long 30 years. That’s why it is the main choice of many home borrowers.
As told 30 year loan plan has lower monthly installments this feature at times appeals so much that people if do not consider that they are going to pay thousands of extra money. But the benefit of it is that interest is 100 % tax deductible which helps you at the end as it lowers yours after tax cost. It also give you the option that if you have extra money more than the monthly installments and less than total loan, pay it off and then pay the remaining money in the easy monthly installments in less than 30 years time period.
Let us take an example regarding interest rate on 30 year and 15 year loan plans respectively. On 30 year scheme on loan of 0.1 million with 7% interest rate your monthly payment will be 665$(total interest rate 139,511.04$). But on the 15 years loan scheme on the same amount you will pay 871$ monthly (total interest rate 56,799$). On the whole you will save 82,712$.
There are 30 years monthly installments for the loan plan. These installments are very lower monthly payments which you are supposed to pay every month, which at times becomes hectic. But if you have the will power to pay every month, 30 years loan plan is a very good option for you depending on your financial circumstances.
Before selecting for any loan you should plan what your financial goals are. In how much time you can repay the loan. Interest rate on 30 years loan plan is high but it gives you a long time to pay the loan which is suitable to you depending upon financial conditions. But it is also an option that you may look for the other available options as well and then select the best one.
