1. Financial ability

The most important way to choose the loan term is based on your financial ability. The shorter the loan term, the more money you will have to pay back the loan each month. If you are financially well-off, you can choose a shorter loan term. If you feel financial pressure is high, you can appropriately extend the loan term.

2. Repay interest

The total interest of the loan is related to the loan amount, method and term. All else being equal, the higher the term of the loan, the higher the total interest will be. Therefore, if you want to reduce the interest rate, you need to reduce the loan term.

3. Other income

The increase in the loan term means that the monthly loan repayment amount can be reduced. If you have other investment income that is relatively high, you can consider increasing the loan years, use the extra money to invest.

4. Age conditions

The term of the loan does not mean that the loan can be loaned for as many years as you want. The bank will make judgments on the age and economic conditions of the borrower. It is generally difficult for older people to get loans with longer loan terms.

5. Loan amount

The loan period should also take into account the loan amount. If the loan amount is small, you can choose a longer loan period, so that the total interest will not be much, but If the loan amount is large, it is best not to extend the loan period too much, otherwise the total interest will be very high.

6. Provident Fund Loans

Loans are divided into provident fund loans and commercial loans. If you are using a provident fund loan, you can extend the loan period, so that you can use more provident fund to repay the loan.

Is the longer the loan term, the better?

The longer the loan term is, the better it is not. It needs to be determined based on the actual situation. The longer the mortgage loan term, the more interest you need to pay. And if you don’t want to pay so much interest, then reduce the mortgage term. However, after the mortgage term is reduced, the greater the pressure you need to bear.

Generally speaking, if you choose a mortgage term, if you buy a house to live in and do not plan to sell the property or replace it with a new one in the long term, the shorter the loan period is within your ability, the better. And if you plan to hold it for a short period of time and have the purpose of increasing your assets, you will trade it out soon. Then you can choose a longer mortgage term.