Many people periodically encounter money issues when trying to purchase certain items or realize their ideas, goals, and aspirations. A loan is helpful in these situations. A loan might help you swiftly close the gap in your finances. It is advisable to apply for a loan from a reputable lender, accomplish your goal, and then repay the loan with monthly EMIs. The three most crucial factors when applying for a loan are loan amount, interest rate, and tenure. We shall concentrate on the aspect of personal loan tenure, also known as personal loan duration, for the purposes of this essay. Let’s first define a personal loan, though, before moving on.
What is a Personal Loan?
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:
- Buying household appliances and electronic devices
- Funding higher education
- Managing wedding expenses
- Addressing a medical emergency
- Paying for a vacation
- Consolidating high-interest debt
Any other rightful purpose as desired by the borrower
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.
Maximum and Minimum Personal Loan Tenure
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.
Things to Keep in Mind While Choosing A Personal Loan Tenure
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
Consider Monthly Income Versus Monthly Expenses
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.
Be Mindful of the Debt-Income Ratio
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.
Decide Tenure Based on Interest Rate
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.
Use the Personal Loan EMI Calculator to Gain A Better Understanding
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.
Check Your Credit Score
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.
Avail of A Personal Loan from Credit Success
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 Credit Success. Following are the steps that you need to follow for availing of a Personal Loan from Credit Success :
Go to the home page of Credit Success by following the link – https://creditsuccess.in/
- Under the Personal Loan section on the Home Page, click on Apply Now.
- Enter your details in the online form, such as First Name, Last Name, Mobile Number, Email ID, PAN Number, Loan Amount and Tenure.
- Upload the required documents online such as KYC documents, address proof, income documents, financial documents and employment proof.
- Your application will then get processed at our end, and the documents will get verified.
- On successful verification, the loan amount will get disbursed to your desired bank account.
- As you can see, the application process is extremely easy with Credit Success. 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.
Conclusion
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 Credit Success offer flexible repayment tenure, an easy application process and quick disbursal.
Frequently Asked Questions
What is the maximum loan duration for the personal loan?
The maximum tenure offered under a Personal Loan is usually 60 months.
What is the minimum tenure of a personal loan?
The minimum tenure of a Personal Loan is 12 months.
What are the Personal Loan tenure options?
Most lenders offer flexible tenure options, the minimum being 12 months and maximum being 60 months.
