A personal loan can be used to consolidate your debt, finance your dream wedding, or renovate your house. The possibilities are endless with unsecured personal loans. You don’t need collateral to get a personal loan. Minimum documents such as your last 3 months’ salary slip, ID, and address proof are enough to start off a personal loan application.
Today, there are many online personal loan platforms offering personal loans 100% digitally to applicants. Such platforms, other than a 100% paperless process, offer flexible EMI and loan tenure options. Airtel Personal Loans offer instant personal loans with minimal documentation and a 100% paperless/digital process.
Many applicants often get confused about the relationship between EMI, interest rate, and loan tenure for a personal loan. This article will talk about both personal loan maximum and minimum tenure and factors to consider before opting for a loan tenure. Without further ado, let’s get started by understanding what the average minimum and maximum tenure offered under a personal loan is.
The maximum and minimum loan tenure for personal loans
Loan tenure basically refers to the time period that a borrower is given to pay off his/her loan EMIs. The loan tenure helps the borrower to plan his/her financial commitments.
Generally, a loan tenure ranges from 12 months to 60 months. However, nowadays, many experienced and reputed lenders offer borrowers the choice of closing a loan in 3 months. Your loan tenure should depend on where you personally stand financially. A higher income can help you close a loan in a short tenure. In case, you have limited income, you can always go for a longer-term loan tenure.
Let’s understand the terms of personal loan maximum tenure and personal loan minimum tenure in detail.
Maximum Loan Tenure
The maximum tenure for a personal loan is different for every lender. You can choose the maximum loan tenure as per your financial situation. Remember, the longer the loan tenure, the lower the EMI amount. Airtel Personal loans offer applicants a personal loan maximum tenure of 42 months i.e., 4 years. If you have taken a personal loan for a large sum, you can go for a longer tenure to make sure you are not crunched financially every month and make all your payments on time.
Timely loan payments for the long term can help you increase your credit score.
Minimum Loan Tenure
Similar to the maximum loan tenure, minimum loan tenure also differs from lender to lender. Usually, the minimum tenure offered is 10-12 months. However, Airtel personal loans offer borrowers the opportunity to close their personal loans in just 3 months. However, we recommend you calculate your financial commitments before opting for a shorter tenure. Short tenures work well if your loan amount is not that huge, and your income is high enough to easily accommodate the EMI amount.
Note: Personal loans with short tenures tend to attract high-interest rates.
We know how confusing it can be to choose the right personal loan tenure for yourself. Don’t worry! The next section of this article will assist you in this area.
Also Read: Personal Loans for Self-Employed in India
Factors you need to keep in mind before choosing a loan tenure
Your EMI should never eat into your savings. Therefore, you need to choose the right loan tenure for your personal loan in order to ensure your EMI amount doesn’t exceed the said limit and leaves nothing for your savings and monthly expenses. Keep reading to know the pointers you need to keep in mind before choosing a personal loan tenure:
Your monthly income (after all necessary deductions) should be considered. As a rule of thumb, your total EMIs should not exceed 40% of your salary. If you have just one personal loan, you can go for an EMI which is 30% or 35% of your salary. If your existing EMI commitments, already take up, say 20%, then your personal loan EMI should not exceed 15% or 20%. Calculate your commitments and make an informed decision.
As discussed above, don’t forget about your existing commitments. Keep aside your monthly expenses fund and then check what is left for your EMI commitments. See if you can pay a given EMI regularly every month.
If the interest rates on your personal loan are extremely high, it is suggested to go for a long-term tenure in order to reduce the monthly EMI amount and make timely payments.
With Airtel Personal Loans, you can use the Personal Loan EMI calculator to check your average EMI amount as per the loan tenure to get an idea even before taking the loan.
Download the Airtel Thanks UPI app to use the calculator and know more about loan tenure.