Tenure is a key aspect of a personal loan. It is basically the time taken to repay the principal amount and the interest. The top digital lending company offers excellent flexibility in term selection as per individual financial capabilities and convenience. For instance, users can choose from 90, 180, 270, 365 and 540 days depending on salary limits. But having proper knowledge of which tenure would be the best suited, especially for first-time borrowers, is crucial for an informed choice.
While the bank fixes the interest rate, you have the liberty to pick your term. A long tenure for a digital personal loan is often considered a safe bet. There are several advantages to why people spread the payment across several months and years. You may consider these reasons to opt for a long tenure for your next loan.
A longer tenure ensures an easy loan with affordable EMIs. The higher the term, the smaller and more cost-effective your monthly dues are. This is simply because the loan term is inversely proportional to recurring payments. It is an ideal option for anyone with a fixed income or those who stick to a well-budgeted lifestyle. A less expensive EMI is also quite a relief when you have multiple other ongoing loans.
Lenders agree to offer you a higher limit on your personal loan. This is because they are confident in repayment capabilities when the EMI is small. You are less likely to default or miss out on the payments. This is not possible with a shorter tenure because then the EMIs are bigger, increasing the odds of payment failure. It is especially risky for lenders since easy loans are not secured with collateral. So, you might not qualify for the desired amount, which is troublesome in times of emergency and otherwise.
A longer tenure offers fantastic financial freedom. You can start with lower EMIs in the initial years. It is especially if someone has other ongoing loans or lacks a sufficient income. Increase the amount as and when there is a rise in your income later on. You might be able to clear off a chunk of the debt with better solvency. This can reduce the burden and make the loan more manageable. You can also smoothly achieve simultaneous life goals once you clear a more significant portion of your personal loan.
Conclusion Download the cash app on your smartphone via Google Play Store or App Store. The top personal loan comes with a tenure of up to 1.5 years. Read the terms and conditions and choose the one that best fits your needs.