How to Choose the Repayment Tenure of Personal Loan Wisely?
By Anupama Deshpande | Mar 11, 2019

Personal Loans are called "All-purpose Loans" as there is no restriction on the usage of the money. You can use the loan for any purpose such as attending a wedding, go on a vacation, for child's education, for home renovation, for credit card bill payment and so on.

Personal Loans have gained a lot of popularity in past few years due to following significant points:

• They are readily available for almost everyone
• Processing time is very less
• Pre-approved Personal Loans are also available
• You can bargain on interest rate with the lender
• No need for any collateral

A loan tenure is the total time period during which the entire loan amount has to be paid by the borrower through EMIs. You must not forget that a personal loan is helpful when you are in dire need of money but at the same time it is also the biggest liability on you till it is not repaid by you to the lender.

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A very challenging aspect while availing for personal loan to choose the right loan tenure. In case you choose the longer loan tenure, you may end up paying higher interest, or, if you choose the shorter loan tenure, you will need to pay higher loan EMIs. Hence, it is very necessary for you, as a borrower, to ensure that the loan tenure that you choose, does not weigh you down with additional monetary pressure. Following Points are important for you in answering How to Choose the Repayment Tenure of Personal Loan Wisely?

It is very essential to calculate your monthly budget vis-a-vis monthly expenses while choosing the right loan term. For making it easy, you should note down all the monthly expenses that you are committed to. After deducting all your expenses from your income, i.e. based on whatever money is left, you can choose the term of the personal loan.

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You will need to consider your existing and future liabilities like your existing EMIs, children's' education fees, house rent, etc. It is true that your income may increase with time but at the same time do not forget to take into account your liabilities.

Before deciding the tenure of personal loan, it is very important to take into account the income you are drawing regularly as well as the rate of interest on personal loan. If your income is not very good and the rate of interest is also high then you will have to keep the tenure large so that you can repay your personal loan comfortably.

You must always try to choose a personal loan tenure that helps you balance all your existing liabilities and the personal loan EMI without much hassle. Above mentioned points will surely be helpful to you at the time of picking the ideal Personal Loan tenure.