Personal Loan Tenure

Balancing Monthly Commitments: Benefits of a 7-Year Personal Loan Tenure

Repaying a loan can be pretty daunting for multiple reasons. This holds true especially if you have a short period to repay the debt or EMIs, which can make it difficult for you to meet ends every month.

Whether salaried or self-employed, you must adhere to a strict monthly budget and manage your expenses accordingly, no matter whether you go for a long or short tenure. So it is wise to opt for a long tenure, as it will help you balance your monthly budget effectively.

Read on to explore how a personal loan with a tenure of 7 years can offer you financial flexibility and improve your financial well-being in the long run.

What is a 7-Year Personal Loan?

As the name suggests, a personal loan with a tenure of 7 years is an unsecured loan with low-interest rates- it aims to establish a solid relationship with the provider with its 7-year loan offer.

Normally, borrowers prefer prolonged personal loans, as they offer better chances to meet personal loan eligibility, lower EMIs, and allow maximum time to repay the loan amount and interest charge.

You may have heard of 2-5 year tenured personal loans, but a few elite financial organisations, like Fullerton, have raised the bar and increased the tenure to 7 years to make it easier for the borrowers to repay.

How Can a 7-Year Personal Loan Benefit You?

Here are some reasons why applying for a 7-year long personal loan is recommended for you:

Boost Your Credit Score

If you are a responsible borrower, who repays their 7-year-old personal loan diligently and wisely without missing or delaying any EMI, it will greatly influence your credit rating.

With a higher credit rating, you get benefits like a good loan balance transfer option, lower interest rates, and better deals on future loans or credit card applications.

A 7-year-old loan also comes with an opportunity to establish a sound relationship with the loan provider, which helps you enhance your creditworthiness. It makes future transactions easily accessible through the same financial institution.

Get a Higher Loan Amount Approved

Approval of the loan amount depends on several factors, like employment stability, income flow, and loan tenure. The longer the tenure, the higher the personal loan amount approval. This is one of the key advantages of a 7-year-long personal loan, which can give you a loan amount as high as Rs. 25-35 lakhs.

Fixed Rate of Interest for the Entire Tenure

Another benefit of a personal loan with a tenure of 7 years is that the interest rate remains fixed for the entire tenure. This means that for seven years, whatever interest rate is applied at the beginning of the personal loan remains static throughout the loan tenure.

Lower EMIs

One of the biggest benefits of applying for a long-term personal loan is the reduction of monthly EMIs.

Let’s take an example here. Mr XYZ and Mr. ABC applied for a loan of Rs. 10 lakhs at a 12% interest rate. Mr. XYZ applied for 5 years, while Mr. ABC applied for 7 years.

According to the personal loan EMI calculator, the EMI borne by Mr. XYZ is Rs. 22284, while Mr. ABC has to pay only Rs. 17653 as monthly EMI against his personal loan.

Higher Chances to Meet the Personal Loan Eligibility and Get Approval

When you apply for a 7-year personal loan, you will have a longer relationship with the financial institution. This also means you stand a great chance of establishing a promising bond and faith with the provider.

Approving short-term loans can be difficult because of the high EMI amount. This makes financial institutions sceptical about the repayment capacity of borrowers. So, a high-tenured personal loan stands a better chance of approval.

Conclusion

Financial institutions customize the best personal loan offers for any capital requirement for you based on your needs, preferences, and repayment capacity. The primary motive of offering a personal loan with such a long tenure is to make it easier for you to repay your debt, in lower EMIs, maximum time, with peace of mind.

You can use the personal loan EMI calculator to derive various permutations and compare loan providers.

Also Read:

Looking To Apply For A Personal Loan? Consider Essential Do’s and Don’ts

Personal loans are among the viable financing options. Its features, like multiple-purpose financing, no end-use restriction, and quick disbursement, make it a preference for individuals looking for funding for financial emergencies.  

Do’s and Don’ts While Applying for a Personal Loan 

1. Check Eligibility First: Borrowers must check the personal loan eligibility parameters to understand if they are eligible to secure a personal loan with the lender.

2. Apply for a Suitable Loan amount: A personal loan amount can be as high as Rs 25 lakh with reputed financial institutions. However, you need to determine the right amount of money that is easily repayable without financial burden.

3. Avoid Long-term Repayment Tenure: A long-term personal loan tenure can reduce the loan EMI (Equated Monthly Instalments) with a lower interest rate and increased number of months to spread the principal amount. But, overall, it results in a high cost of borrowing. Therefore, consider a short-term loan and save on total interest costs. It can be between 12-60 months.

4. Choose a Lender with Digital Loan Processing Facility: For easy and quick loan processing, you can approach a lender leveraging technology and allowing customers to complete all formalities digitally, from making an application and documentation to loan disbursal.

5. Avoid multiple loan applications: Multiple loan applications can harm your credit score. With every hard inquiry by lenders, the credit score decreases. Therefore, avoid making a loan application with multiple lenders at the same time. Also, take a break before making another application if one loan or credit card application gets declined. 

Considering these crucial aspects, individuals can obtain a loan without any hassle and financial burden for repayment. Look for lending institutions offering affordable loans following a convenient digital process.

How To Choose Personal Loan Tenure Smartly?

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While a personal loan is a great tool to get instant funds, it is important to manage it properly to ensure that it does not impact your finances. For management, there are three main factors: Loan amount, interest rate, personal loan tenure. (Checkout personal loan Interest rate here)

While the loan amount and interest rate are in the hands of the lender, you can choose the loan tenure with some simple tips. 

Tips to Follow While Choosing Personal Loan Tenure:

  • Assess your monthly budget:

One of the biggest factors which will help smartly planning the loan tenure is understanding your monthly budget. Take a note of your monthly commitments, bills and the earning, it will give you a better idea of how much EMI you can pay.

  • Evaluate your existing liabilities:

You must evaluate your existing liabilities, another factor, must be looked into is your existing liabilities.

  • Use an EMI calculator:

If you know the loan amount, the interest rate, the EMI calculator will help you in calculating the loan tenure. An EMI calculator is a key tool that must be used while choosing personal loan tenure.

  • Assess your financial aspects:

Whether you are a salaried individual or a businessperson, make sure to assess your monthly burden, to accommodate a higher EMI every month.

  • Calculate the interest cost:

Once the interest rate has been fixed, calculate your interest cost. The more the tenure, the more will be the interest you pay. So, make sure to optimise your interest cost, by using various combinations of tenure options.

Conclusion

A personal loan is one of the easiest financial tools in times of emergencies, however, it is important to maintain a strict repayment routine to ensure that it does not become a financial burden. So choose your loan tenure wisely.

Additional Read: Close your high interest loans by taking a personal loan from Fullerton India