For Personal Loans, What Are The Maximum And Minimum Tenures
Are you in immediate need of money but don’t have the funds? All you need to do is apply for a personal loan to fulfill those needs. The best part about a personal loan is that you don’t have to keep anything as a security or collateral, unlike gold loans, where gold is pledged for the money.
However, you must consider a few things with a personal loan, such as fees, interest rates, and most importantly, the minimum and maximum tenure of the loan by when you have to repay the loan. Therefore, when you apply for a personal loan, make sure you consider and check all the options given by the lender.
No matter how lucrative, instant personal loans can cause serious problems if not given enough consideration. So, let us find out in detail what a personal loan is and the minimum and maximum tenure of personal loans.
What Is A Personal Loan?
Personal loans come in handy when you don’t have any quick cash, and the need is urgent. The need for money should be huge. A personal loan is an example of an instalment credit, where you get money as a lump sum payment. These types of loans are for personal use. You can use it for medical expenses, education, international trip, wedding, etc. Thus, a personal loan is your best choice here.
You can apply for a personal loan through hundreds of quick, simple loan choices available. You can apply for most of them in 10 minutes, all thanks to the growth of peer-to-peer and online lenders. But there is a catch here, depending on how quickly the lender receives and processes your documentation, the entire approval procedure of an instant personal loan could take up to one working week.
Depending on the lender, personal loans usually range from 12 to 60 months. Lenders charge interest rates along with documentation or administrative fees. These fees are deducted from your loan amount once it is accepted. Moving ahead, we will look at the best tenure for repaying a personal loan.
Tenure Of A Personal Loan
The borrowers have preferences over the tenure of the loan payment. For example, if you have taken a huge loan, you will get more time to return the money, and the EMIs will also be less. But, you can also go for less loan amount with lesser loan repayment tenure. Of course, this will put a strain on your finances for some time, but you will be done with such a loan early.
Let us now look at the minimum and maximum tenure of personal loans:
- Minimum tenure of Instant Personal LoanWhen you take a personal loan, you must start repaying the same within 30 days and in instalments. The lenders give you a time period of six months to 12 months to pay back the loan. After that, you can repay the same as per the loan amount you have taken from them. The minimum tenure usually differs a lot from lender to lender. If your income is high, you can quickly repay your loans.
- The maximum tenure of an Instant Personal Loan
The maximum tenure of a personal loan is 42 months to 60 months, which is given by the lender. This tenure also differs as per the lender. The tenure of 42 months allows the borrower to return through lower EMIs, thus not putting any strain on your monthly budget and income. It is best suited for those people whose income is low and who have other financial duties.
Choosing the correct tenure
One of the most vital things in a personal loan is deciding the tenure period. Note that your monthly EMI payment will be reduced if the loan’s term is longer. Larger EMI costs are linked with shorter terms, but your loan will be paid off sooner. If you have a short-term money issue, your bank may extend the loan’s tenure, lowering your monthly EMI payments burden. But longer loan tenure results in higher interest payments, raising the cost of the principal amount borrowed.
Your loan tenure should be decided by many factors, starting with the amount you desire to borrow. For example, choosing a long tenure is not a good idea if your loan amount is tiny, such as two times your monthly salary.
A longer tenure is good if your loan amount is higher than 4 times your monthly income. Your monthly repayment amount will get low as a result, and you can also pre-close your loan for a small fee. But, if your salary is high and allows you to save enough, you can choose a shorter loan term and avoid accruing more interest over time.
The Bottom Line
Now that you understood a personal loan’s minimum and maximum tenure, you will have an idea of the impact an instant personal loan repayment period can have on your money and income. Still, if you are unclear about choosing less tenure or more tenure to clear your loans, get in touch with Piramal Finance. Piramal finance, where the customer is god, would clarify all the concepts and help you in the process. To read more such articles, visit https://www.piramalfinance.com/ right now!