As mid-term advances, personal loans come with sufficient tenor extension that allows a prospective borrower the necessary flexibility to choose appropriately. With some reputed lending institutions in the market, availing of a personal loan maximum tenor extension of up to 5 years is possible.
An individual, nevertheless, needs to make a wise tenor selection as it can impact the overall affordability of their advance.
5 crucial aspects to check during personal loan tenor selection
For a clearer perspective, if you have availed a personal loan with an extended tenor, you are sure to end up repaying the total liability with a high-interest accumulation and vice versa. Other factors bear the impact of tenor selection as well.
So, here are some crucial junctions to understand related to your personal loan when selecting a repayment tenor:
- Impact on EMIs payable
The personal loan maximum tenor, an applicant, selects for repayment is inversely related to its EMIs payable. Thus, a shorter tenor means higher EMIs, while extended tenors bring down its instalment amount.
As the EMIs payable determine the immediate monthly affordability, you must check the impact of your opinionated tenor on the EMIs before deciding. To make the assessment accurate and in minimal time, make use of a personal loan calculator available online. It would allow you to alter the tenor value to check its impact on EMIs payable for suitable term selection.
- Interest rate applicable and total interest payable
To find the right personal loan tenor that works for you, it is crucial to consider its impact on total interest payable as well. The same EMI calculator mentioned above can be utilised to compute the total interest value as well. Note that the tenor you select directly impacts the total interest payable, which means that a longer tenor would mean higher interest liability and vice versa.
Another aspect to factor in for personal loan maximum tenor selection is the rate levied on your advance. Obviously, a higher interest rate leads to inflated interest payment if you select the maximum tenor available.
Combining the two factors mentioned above, it is crucial to strike a balance between the EMIs payable and the total interest payable to find optimal affordability for your personal loan. In addition, it shall help manage your personal loan EMI repayment efficiently.
- Condition for loan amount selection
When selecting the loan amount to avail, an essential condition implies its affordability for you, which is closely related to the chosen tenor. In contrast with the factors mentioned above, a higher loan amount demands the choice of an extended tenor for the immediate repayment to remain affordable.
It is thus advisable to apply for only as much financing as necessary to keep the repayment stakes low. EMI calculators available online can come to much assistance here. You can use these calculators to get the most out of your personal lending with Bajaj Finserv or any other lender, for that matter.
This lender also brings pre-approved offers to make financing hassle-free and less time-consuming for customers. Available on personal loans, along with other financial products like business loans and credit cards, you can check your pre-approved offer with minimal details only.
- Fixed monthly income
Your instant personal loan tenor suitability is also impacted by your fixed monthly income. Therefore, the higher your income, the better your chances of receiving approval for a shorter tenor. It is thus advisable that you document all income sources to receive approval for a shorter repayment term even with higher personal loan maximum tenor availability.
- Repayment of existing liabilities
When processing your personal loan application, a lender is likely to check your existing fixed monthly liabilities to confirm your repayment capacity and financial standing. Your selected tenor approval is likely to receive a setback if the liabilities are above 50% of your monthly income.
You may thus want to make the repayments in advance when applying for a personal loan. For instance, when servicing your loan with Bajaj Finserv, obtain the Personal Loan Statement to check your loan outstanding and make prepayments if possible. You can obtain your Bajaj Finserv Loan Statement online free of cost.
An optimal tenor is the one that accommodates the EMIs well into your income with other liabilities while keeping the interest in check. You can use an eligibility calculator available online to check personal loan maximum tenor and amount availability as per your borrowing profile.
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