If you are in your 20s and want to apply for a home loan, there are more chances of approval than in other stages of life. You are young, productive, and years of active working age for paying back the house loan amount. Loan distributors and financial institutions prefer young people with stable incomes as the best candidates for a home loan, personal loan, etc.
We will delve deeper and explain point-wise why the 20s is the ideal time for a home loan in the blog. Read through the passage to know and refer for your purpose.
Advantages of Home Loan in the 20s
1) Early Start Advantage
We start a career after graduation or Post graduation in the 20s. It is the time when our focus on career, business happens to be at its prime. People tend to invest in properties and homes in the early years. But not all of us have sufficient funds to do big-ticket investments, and we need financial support.
Loan distributors and financial institutions provide a convenient route to procure a home loan for your dream house. Especially, financial institutions sanction home loans comparatively faster if you are young, have a stable job or business with a good salary. Take advantage of the early beginners and apply for a home loan at the start of the career or early phase of the business.
2) Longer Home Loan Tenure with Low EMI
Loan distributors and banks decide loan tenure backwards from your retirement age or end of productive age. If a person wants to buy a home loan in the 40s and 50s, their loan tenure will be shorter and equated monthly instalment will be higher. Older loan accounts also consider high-risk in nature.
On the contrary, if you apply for a home loan in the 20s, financial institutions offer longer loan tenure and lower EMI. Risk-factor is low with a young person’s loan account. Approximately, a young person has around forty years of working age, and the maximum home loan tenure in India is thirty years, which means you will close your loan account in the active working years of your life.
3) High Amount of Loan
A customer can get a higher amount of loan in the 20s because of prospects of growth in career, increment or business expansion (if you are a business person). Banks and loan distributors consider your career prospects based on your qualifications, designation, nature of business, years of experience, and projection about the future.
After analysing your profile, they will provide your loan amount eligibility. There are chances of getting a higher loan amount in the 20s with an impressive personal or business profile. Loan distributors offer attractive home loan interest rates if you have a high-paying job, stable business turnover, and a minimum of two years of working experience.
4) Higher Chances of Home Loan Eligibility
Most of us start building our credit score in the early stage of our career and business. People get increment, promotion and rise the ladder of the career or business. Your repayment capacity, stable income, credit score decides eligibility for the loan, and there are fair chances of your good score on all three parameters if you are in your 20s with a good stable source of income.
Plan early in life to enjoy the silver years of retirement.
5) Fewer Responsibilities and Liabilities
Another crucial advantage of the 20s is fewer responsibilities and liabilities for most people. The time is ripe for making a long-term investment for buying a home because of no other commitments.
The only thing you lacks is experience and enough fund for a down payment. Approach a renowned loan distributor or bank for a safe and secured loan agreement. Do not ever try private money lenders and non-regulated financial institutions.
6) Wealth Creation
You should also see the home as an investment. You are taking a home loan to buy a home that will create wealth. It is more of utilising the fund to make money out of the money. So, along with a place to reside, a home loan for a house can be considered as a wealth creation with the help of financial institutions.
Take a home loan in your 20s to make an impressive wealth portfolio.
7) Value Appreciation and Tax benefits
The value of properties and houses always appreciate. The cost of the property depends on multiple factors such as market trends, Government decisions & regulations, global trends, pandemics like Covid-19, etc.
Home loans in the 20s avail several tax benefits too.
Things to Consider Before Applying for Home Loan in the 20s
There are certain things to consider before going ahead with the home loan application. If you are ready to follow the below-mentioned conditions, you are all set to start a home loan application to own a home in your 20s.
A steady and good source of income for equated monthly instalments without a break
There should be enough money left after EMI payment for home expenses.
Fund for processing charges, down-payment, and other fees related to home loan application
You have a good credit score and no cases of defaults or late payments.
Though in the beginning, you might have no liabilities, in the due course of loan tenure, there will be marriage, kids, and other family responsibilities.
Ready with a financial plan for the entire loan tenure to handle planned and un-planned monetary expenses
Thus, if you are in your 20s with a good source of income through a job or business, this is the ideal time to apply for a home loan. Refer to all the points above, make a long-term financial plan, and own your dream home in the young years of the life.