A personal loan is an unsecured loan where you can borrow the fund without providing collateral. You can use the loan amount for many purposes. It could be dealing with emergencies, pursuing educational courses, or financing your enterprise. Nevertheless, you don’t have to give collateral for a personal loan. It is why you need to plan before applying for a personal loan instant approval. When planning your finances, you need to think about the personal loan tenure that you choose.
The tenure in the loan is the time between the disbursal of the loan amount and the last EMI payment you need to make. For instance, your loan gets disbursed on 1st January, 22. If you paid the amount on 1st January, 25, the tenure was for three years. The minimum tenure for a personal loan EMI is about two years. Nevertheless, the minimum and maximum tenure of a personal loan can change from one lending institution to another.
Now that you understand the meaning of repayment terms, you should tenure you are comfortable with and as you require. We will give you tips to help you choose tenure wisely. It is a part of the process of getting your personal loan instant approval.
Consider Your Financial Obligations
The first step in choosing the tenure for a personal loan is to understand your monthly expenses and income. It will help you plan your funds to service a personal loan EMI.
While calculating monthly expenses, keep in mind the amount you need to pay for your debt. Check your debt to income or DTI ratio. If you don’t have an urgent requirement for funds, it is better to apply for a personal loan it is below 50%. It will help you get personal loan instant approval.
Calculate The Loan Amount You Need
Before you apply for a personal loan, you need to finalize the amount you need. The loan amount is directly proportional to loan tenure.
If you want to find how much to pay for a personal loan, find the interest charged by the lending institution.
The next step is to calculate the total interest payout with many tenure options. For instance, you procured a personal loan of 10 lacs INR. If your interest rate is 12.5%, your interest payout will be 27,58,40 INR. If you repay the loan in three years, your interest cost will be 2,04,331. Here is how you can calculate the interest payout for each tenure.
Manual calculations tend to be error-prone and time-consuming. You can use a personal loan EMI calculator on the lending institution’s website and understand how much your monthly EMI will cost you.
- Enter the loan amount and interest rate.
- Enter the tenure for which you want to process the loan.
- Tap on the calculate option.
- The calculator will display the monthly EMI you pay on your specified loan condition.
If you think it will be hard for you to pay the loan within the tenure, you can increase the term.
In A Nutshell
Selecting the apt personal loan tenure is as vital as choosing the right amount and interest rate. Remember to check all the criteria to see whether you get a personal loan instant approval or not. Fullerton India, a reputed lending institution with a pan India presence, offers personal loans at competitive interest rates. It invests in digital capabilities to enhance the experience of clients and stakeholders. For more info, reach out to their customer service.