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Know The Maximum & Minimum Tenure For Personal Loans
A lot of us occasionally face a funding mismatch while buying certain things or trying to fulfil one’s dreams, goals and aspirations. It is at such times that a loan comes in handy. A loan is a great enabler to bridge the gap in your finances quickly. It is preferable to go in for a loan from a good lender, achieve your desired goal and pay off the loan through regular EMIs. When applying for a loan, the three most important variables are – loan amount, rate of interest and tenure. For the scope of this article, we will focus on the aspect of Personal Loan tenure, also called Personal Loan duration. But before that, let us understand what a Personal Loan is.
A Personal Loan is an unsecured form of credit borrowed from a bank or NBFC, which can be used for fulfilling any funding requirement. Generally, a Personal Loan is used to fulfil funding requirements which are of a personal nature. The most common uses of a Personal Loan are as follows:
Given the ease of application, flexibility of usage and quick turnaround time from application to disbursal, a Personal Loan is an extremely popular product for individuals looking for quick funding. Additionally, given the unsecured nature of the product, it becomes all the more attractive to applicants who do not want to pledge any assets.
Different lenders offer Personal Loans with varying loan tenures. Typically, the Personal Loan minimum tenure is one year (12 months). Generally, lenders do not offer a tenure which is lower than 12 months. Most lenders also have a lock-in period of 3 or 6 months, wherein the borrower is not allowed not to pre-pay (close) the loan. Similarly, the Personal Loan maximum tenure is generally 60 months (5 years). Some lenders may also offer tenure of up to 7 years (84 months) or higher.
For the same loan amount and interest rate, a Personal Loan with a higher tenure has a lower EMI while a Personal Loan with a lower tenure has a higher EMI. Also, the EMI for a loan with a longer tenure has a higher interest component, while the EMI for a loan with a shorter tenure has a lower interest component. You must choose the loan tenure wisely. It should neither be too high that you end up spending a large part of your earnings on servicing the EMI. Conversely, the tenure shouldn’t be too long that you are saddled with EMI payments for a long time.
A loan is a great enabler when you need funds to achieve your personal goals. However, you need to choose the loan tenure wisely so that the EMI does not eat into your savings. The following are some things to bear in mind while choosing a Personal Loan tenure
Make a note of all the monthly expenses that you have to cater to so that you can calculate the EMI amount to be paid each month.
The debt-to-income ratio should ideally not be more than 30-35%, else debt servicing can be an issue. Choose a tenure that keeps your EMI and debt-to-income ratio in check.
If the interest rates are high, it makes sense to have a higher tenure so that the EMI is lower and there is less pressure on your monthly finances.
Most lenders offer a Personal Loan EMI calculator on their website to help borrowers calculate the EMI beforehand. You must make the most of this (free) tool and make an informed decision by adjusting the loan amount, tenure and interest rate.
Whatever your loan requirement and your financial position, your credit score makes a huge difference to the interest rate, tenure and other loan conditions that you get. Always ensure that your credit score is as high as possible. A score of 750 and above is considered to be very good by lenders.
Considering all the above-mentioned factors, you can finalize a suitable tenure for your loan. Once you finalize the amount as well, you can rest assured that you will get one of the lowest interest rates in the industry on your loan from Poonawalla Fincorp. Following are the steps that you need to follow for availing of a Personal Loan from Poonawalla Fincorp:
As you can see, the application process is extremely easy with Poonawalla Fincorp. It is a 5-step process with no hassles and minimal documentation requirements. Thus, we ensure that the entire process from application to disbursal is kept simple and fast.
Most lenders provide Personal Loans with tenures ranging between 12 months and 60 months, with some lenders offering an extended tenure of up to 84 months. Largely, the Personal Loan maximum tenure is 60 months. As a borrower, you need to choose the tenure that is most comfortable to you and which results in the most affordable EMIs. Lenders such as Poonawalla Fincorp offer flexible repayment tenure, an easy application process and quick disbursal.
The maximum tenure offered under a Personal Loan is usually 60 months.
The minimum tenure of a Personal Loan is 12 months.
Most lenders offer flexible tenure options, the minimum being 12 months and maximum being 60 months.
Loans provide financial assistance, from necessities like medical expenses to buying a home to planning a vacation or luxuries like buying an expensive smartphone. We avail of loans for a variety of reasons.
Most small and medium-sized businesses need to raise funds from time to time to take the company to the next level. These businesses have always been the backbone of the economy.
As medical technology advances and peoples purchasing power increases, more and more Indians are using medical services, the key to which is medical stores. Medicines are seeing about 17% inflation every year.
Collateral-free loan refers to any loan that does not require any asset, security deposit or the backing of a guarantor. These are also called unsecured loans.
Getting a personal loan approved has become a much simpler process. You can easily get a personal loan with minimal documentation. Having said that, you need to have a precise understanding of how to repay your loan quickly.
