A personal loan helps overcome challenging financial situations, allowing access to the funds with the flexibility to repay the same in equal monthly instalments over a period. However, borrowers are often perplexed about choosing the personal loan tenure. Here are some tips for making an informed decision.
- Consider Existing Liabilities
A clear understanding of existing liabilities helps to evaluate the personal loan requirements. LoansJagat recommends borrowers should clear a personal loan before applying for another loan. Using debt consolidation, individuals can combine existing loans, reduce and streamline their liabilities. Debt consolidation can also reduce the overall loan tenure.
- Understand Monthly Income
An individual’s monthly income decides the personal loan amount one can take. As a general guideline, not more than 20% of the monthly salary should be for debt repayments. Increasing loan tenure can reduce the monthly debt liabilities.
- Loan Amount
Repay a smaller loan early to finish the personal loan liability. Similarly, a higher loan amount becomes manageable with a longer loan tenure.
- Improve Credit Score
A longer personal loan repayment tenure helps to improve the credit score. As a strategy, applicant’s can improve their credit score by taking a small personal loan for a higher period.
- Future Prospects
Is there a home loan on the radar in the future? Do you need a personal loan anytime soon to sponsor your child’s education? These are some questions one needs to ponder to evaluate the prospects of the loan tenure. It is a good idea to finish the personal loan before applying for a new personal loan. A 6-month cool-off period helps to get better Personal Loan interest rates.
- Personal Loan EMI Calculator
The personal loan EMI calculator helps to understand the implication of the loan on the monthly repayment amount. Individuals can adjust the loan tenure to get the optimal monthly instalment for easy repayments.
How to get the best Personal Loan?
LoansJagat helps individuals get the best personal loan from over 40 Banks and NBFCs with a single application. Applicants can compare and choose the best loan offer as per their requirements. LoansJagat also provides tools like a personal loan EMI calculator to understand the elements like loan tenure, Personal Loan interest rates, prepayment charges and other terms and conditions.
A dedicated loan officer from LoansJagat helps applicants evaluate all the options, get guidance on all steps from application to loan disbursal.
Final Word on the Loan Tenure
Choose the loan tenure carefully to meet the guidelines mentioned above. Some key points to consider are the existing liabilities, monthly income, EMI amount, impact on credit score and future loan prospects.
One should also use the tools like Personal Loan EMI Calculator to understand the impact.
Apply for a loan using LoansJagat to get the best personal loan interest rates, tenure, amount and other features from the top lenders.
In a nutshell, a longer tenure may reduce the monthly liability and improve credit score. A small loan tenure reduces the net outflow of money and finishes the loan faster.