Personal loans are one of the most preferred and easily accessible ways to obtain finances and use them for a wide range of legitimate purposes without any end-use restriction. Lending institutions can offer personal loans with many easygoing options for repayment duration, between 12-60 months. The loan repayment tenure matters in different ways. Therefore, customers should understand how a longer or shorter tenure affects their borrowing.
To get a personal loan online with an informed decision, one should know the following key points explaining why a personal loan repayment timeline matters:
- The repayment tenure impacts total borrowing costs.
Lenders approving a long-term loan application take a high risk on the sanctioned loan amount. Therefore, they charge a high-interest rate to get exposed to a high default risk during a long repayment tenure. If one's monthly cash flow allows, it would be best to apply for a shorter-term personal loan.
- The repayment tenure affects EMIs.
The choice for a repayment tenure should be based on the repayment capability. The longer the loan tenure, the smaller the monthly payment towards the loan. Similarly, a short-term loan means a significant amount of EMIs (Equated Monthly Instalments). While checking
eligibility for a personal loan, one should estimate the personal loan EMI also during the selected tenure. With the help of a personal loan EMI calculator, it is a simple calculation that takes a few seconds. One can try different combinations of loan tenure and amount to reach the desired and convenient EMI.
Thus, consider a suitable personal loan tenure to repay the loan without any financial burden and avoid mismanagement of funds.
