festive season If you are considering taking a Personal Loan, then take special care of the loan tenure. If you know how to manage the loan tenure well, you will be able to save a lot on personal loan. Today we are talking to you about how to choose the loan tenure. What benefits will you get from this? If you take a personal loan for 10 to 12 months, banks will charge you less interest. This type of personal loan can also be called short term loan. Whereas, if you give loan for 1 to 5 years then it will be called long term personal loan. However, banks will charge you more interest on this.
short term personal loan
- Usually it is between 10 months to 12 months.
- Its interest rates are low.
- It is beneficial for borrowers who borrow a small amount and want to pay back the loan immediately.
- High income individuals can make huge savings by choosing this type of loan.
Long Term Personal Loan
- Usually it is between 1 to 5 years.
- The longer the tenure, the higher the interest rate.
- Beneficial for borrowers who can afford monthly payments and want to repay gradually.
- Less EMI amount has to be paid.
Keep these things in mind while choosing the loan tenure
When choosing the tenure of your personal loan, consider the purpose of the loan. For example, if you are borrowing for a short-term goal, such as a vacation, a shorter term loan may be more suitable. Conversely, for long-term objectives like home renovation or pursuing higher education, a longer period may be beneficial. Assess your monthly income and expenses while choosing the loan tenure. Shorter loan tenures result in higher monthly payments, which can impact your budget significantly. The interest rate on personal loan may vary depending on the loan tenure. Generally, loans with longer tenures have higher interest rates, which means you may have to pay more over the tenure of the loan.
