What is the Longest Tenure for Which You Can Get a Personal LoanSmall cash loans are not enough to fulfill major financial purposes. That’s when long-term personal loans help to hold a prolonged financial need. Loans that range between 5 to 7 years are counted as personal loans with a longest tenure. When a huge amount of money is borrowed, lenders give a longer repayment tenure to clear the heavy loan amount conveniently, charged with a burden of interest.
For instance, a personal loan of Rs.10 lakhs is borrowed to invest in commercial machinery or to buy a property, then such loans feature a longer tenure of more than 5 years. The loan repayment tenure may vary from lender to lender based on your regular income and collateral/security submitted.
As a borrower you can choose between a short-term long and a long-term loan tenure depending upon your requirement of funds and repayment ability.
When to Choose a Longest Tenure for Personal Loan?
A borrower may opt for a longest personal loan tenure ranging from 3-7 year or more to meet a significant financial need or an emergency expense. Since the loan repayment tenure is longer, the interest rate charged is lower than short-term loans. While personal loan does not require any collateral, longest tenure requires a collateral or a guarantor to prove your creditworthiness. However, this requirement may differ from one lender to another.
Taking personal loan for a longer tenure will help you to manage your EMIs smoothly and allow you to make timely payments that will not feel like a burden. Also, long term tenure can impact your credit score positively and the increased score will be reflected in your financial history as you go on making scheduled payments.
Features and Advantages of Longest Tenure for Personal Loan
- High loan amount with Lower EMI- A higher loan amount borrowed will have lower monthly payments with a longer tenure. Instead of quarterly or bi-monthly repayment schedule, opt for a monthly EMI payment that you can afford to repay on time.
- Facilitates major purchase- Longest tenure loan enables seeking a higher loan amount for the purchase of commercial assets, heavy debt consolidation, home repairs, education, travel, wedding and for many other personal purposes.
- Improves credit score- Benefit of a long-term loan ensures improved credit score as the EMI payments are made without any delay with reduced interest rate.
- Reduces repayment burden- Taking a long-term tenure may reduce your burden of repayment. A young borrower with a low income will find a long-term loan viable instead of high interest short term loans.
- Improves loan eligibility– Choosing a longer tenure is more likely to improve your loan eligibility, as the EMI amount gets lower, which means the repayments are more likely to be on time. To the lender, it will appear as low risk lending and in the process your eligibility will get improved.
- Automated repayment method- The online payments are safe through ECS facility or auto-debit feature, which is offered by most of the lenders. The automated way of payment makes self-deduction on the scheduled date and time. This eliminates the chances of missed or delayed payments.
- Loan EMI calculator- This is a fast pace tool available on personal loan apps and websites. It gives borrowers a free hand to select their loan amount, tenure, and interest rate. These three variables when entered correctly give an EMI figure in seconds. If the EMI seems out of your budget, you can flexibly reset the variables to get a suitable EMI.
However, longest tenure selected for a personal loan has its pros and cons. But it’s up to a borrower’s monetary need that will be fulfilled in a short-term loan or a long-term loan. Longest loan tenures are undoubtedly easy to repay and can guarantee more loan amount as compared to unsecured loans.
Note: SimplyCash eligibility criteria is much simpler, to know details click here.