Whether it’s a sudden travel plan, a car breakdown, a house emergency, or a burst pipe, unexpected expenses can knock on your door anytime. Especially towards the end of the month, when your salary disappears, and a financial crunch comes squirrelling into your life. In such cases, either you think of borrowing some money from your friends or family, or you turn to a credit card. This might solve the problem once, but not every time. So, what happens when you run out of all the options to borrow some money from? If you do not want to strain your relationship with your friends or family, StashFin can assist you in getting a personal loan with loads of benefits.
Instant personal loans come with benefits, but at the same time, it is important to fully understand the terms and conditions and especially comprehend personal loan tenure, minimum tenure, and maximum tenure. This is because the maximum loan tenure for a personal loan and minimum tenure decide your monthly payments and overall cost of borrowing. So, if you are keen to understand precisely the maximum and minimum tenure for Personal Loans, this blog will help you!
What is a Personal Loan Tenure?
A Personal Loan is an unsecured loan issued by a bank or non-banking financial company (NBFC) for personal use on the basis of creditworthiness and income rather than collateral. These are generally fixed-rate loans, which means that the rate of interest remains constant throughout the loan period. When you take a personal loan, you are bound to repay it within a defined period, which is called a loan tenure. It plays an important role in determining your monthly EMI (Equated Monthly Installments) for the loan.
Various types of loans are available, each with different repayment terms. For example, the tenure of a personal loan can be as short as 3-6 months, while other loans, such as home loans, can have loan tenures of up to 30 years. StashFin offers outstanding flexibility with convenient EMIs and tenure of your choice ranging from 3 months to 36 months.
What is the Maximum Loan Tenure for the Personal Loan?
The personal loan maximum tenure for a Stashfin Personal Loan is 36 months (3 years). This tenure allows borrowers to spread out their repayments, making EMIs more affordable. Opting for a longer tenure can be beneficial if you prefer lower monthly EMIs, but it also results in higher total interest costs over time.
Typically, most loan platforms in India offer personal loan tenures ranging from 12 to 60 months (1 to 5 years).
Before choosing the personal loan maximum tenure, consider factors like total interest payable, prepayment options, and EMI affordability.
What is the Minimum Loan Tenure for the Personal Loan?
With Stashfin, the personal loan minimum tenure is 3 months, offering borrowers a short-term financing solution for urgent financial needs. Opting for a shorter tenure means you can clear your loan quickly, reducing overall interest costs. However, this also results in higher monthly EMIs, so it’s essential to ensure affordability before selecting this option.
Most loan platforms in India typically offer personal loan minimum tenures ranging from 1 to 6 months, depending on the lender’s policies. Some financial institutions even provide ultra-short-term loans with one-month repayment cycles, ideal for borrowers who can repay quickly and avoid long-term interest accumulation.
What is the Typical Duration of a Personal Loan Tenure?
Personal loan tenure refers to the period within which the borrower must repay the loan, including both the principal and interest. Typically, personal loan tenures range from 12 months to 60 months (1 to 5 years), though some lenders may offer shorter or longer durations based on eligibility, loan amount, and credit profile.
Shorter loan tenures result in higher EMIs but help borrowers clear their debt faster with lower overall interest costs. On the other hand, longer tenures reduce the monthly EMI burden but increase the total interest paid over time. Lenders determine loan tenure based on factors like income stability, repayment capacity, and credit score.
Short-Term vs Long-Term Tenure: Which One is Better?
Choosing between a short-term and long-term loan tenure depends on your financial goals and repayment capacity. While short-term loans come with higher EMIs but lower overall interest costs, long-term loans offer affordable monthly payments but may lead to higher interest expenses over time.
| Feature | Short-term Tenure in Personal Loan | Long-term Tenure in Personal Loan |
|---|---|---|
| Repayment Period | Minimum tenure is 3 months | The maximum repayment tenure is 36 months. |
| Monthly EMIs | Higher | Lower |
| Total Interest Paid | Lower | Higher |
| Impact on Credit Score | Timely payments improve credit score quickly. | There is slower improvement in credit score, but consistent payments can positively impact credit score. |
| Ideal for | Immediate financial needs, debt repayment, smaller/leisure expenses | Larger purchases, home renovations, education, and business expenses |
| Risk Factors | Higher risk of financial stress due to higher EMIs | Lower risk of financial stress but potential for higher overall interest cost |
| Best Suited For | Individuals with a stable income and strong financial history | Individuals with consistent income and a clear long-term financial plan |
Key Factors to Consider When Choosing Personal Loan Tenure
When picking your personal loan tenure, the following essential factors must be considered:
Purpose of Loan
The first step is to identify the reason for and requirements for the loan. Knowing the reason will help you estimate the appropriate time to take a loan, and understanding the requirements will help you clearly understand the loan amount you need. You will also get clarity on whether you need a loan for a shorter tenure for an urgent need, like a vacation or investment or for a longer tenure, like a home renovation.
Monthly Payout Capacity:
Another important factor is to consider monthly repayment capacity. If you have chosen a personal loan with minimum tenure, this means that you will have to give away higher monthly payments. And if you opt for a personal loan with maximum duration, your EMI will be comparatively smaller.
Pre-payment Options
The flexible repayment option is like the icing on the cake. If you think there are chances that you can pay back the loan early without penalties, then choose a longer tenure and pay it off quicker if your financial situation improves. Stashfin allows an interest-free one-month repayment facility for all users.
Rate of Interest:
The personal loan interest rates vary with the loan tenure. Longer tenure means a higher rate of interest; thus, be very thoughtful about the interest you would want to pay for the loan amount.
Age
If you are close to your retirement, then a shorter personal loan tenure can be the best option for you. Retiring with debt can be painful. Younger individuals can easily choose the personal loan tenure based on their source of income.
Financial Goals
If the goal is to become debt-free early, then shorter personal loan tenure will be the best choice. But if the situation allows a small EMI amount, then maximum personal loan tenure is the best option to look for.
How to Choose the Right Loan Tenure for Your Needs?
Selecting the right loan tenure is crucial for managing your finances effectively. The tenure determines your Equated Monthly Installments (EMIs), total interest payable, and overall repayment experience.
- Assess Your Repayment Capacity
Consider your monthly income, expenses, and financial commitments before deciding on a tenure. If you can afford higher EMIs, a shorter tenure is ideal as it reduces the total interest cost.
- Compare EMI and Interest Costs
A longer tenure lowers EMIs but increases total interest paid. Conversely, a shorter tenure means higher EMIs but lower interest costs. Use an EMI calculator to find the best balance.
- Consider Future Financial Plans
If you expect an increase in income or future financial responsibilities (education, home purchase, etc.), choose a tenure that aligns with your goals.
- Check for Prepayment Options
Some lenders allow prepayment or foreclosure without penalties. If you plan to repay early, opting for a shorter tenure with higher EMIs may be beneficial.
Conclusion
Stashfin can help you get an instant loan of up to Rs.5 Lakhs with flexible repayment tenure (upto 36 months) and one month of interest-free credit. You can also get access to profitable bonds and Insurance options to invest in at affordable prices. The interest rates usually start at 10.50% p.a. and are applicable only to the amount withdrawn. The best part is that they require minimal documentation and the quickest disbursal.
So, if you are unsure how much loan amount you are eligible for, download the Stashfin app and register yourself. Get the free CIBIL analysis and achieve your financial goals.
Frequently Asked Questions:
1. How does the loan tenure affect monthly payments?
Loan tenure is inversely proportional to monthly payments. The longer loan tenure leads to lower monthly payments and a shorter tenure leads to increased monthly payments.
2. Which is better: a short tenure or a long tenure?
The most important part is to maintain your CIBIL score and prioritise timely repayments to avoid penalties. Thus, whether you should choose minimum tenure for personal loan repayment or maximum tenure, be sure of your repayment schedule and capacity.
3. Can I change the loan tenure after taking the loan?
With Stashfin, you can get a flexible repayment tenure facility. This means that you can repay the loan the day you feel like you have the complete amount ready.
4. Are tenure options the same across all lenders?
No, tenure options are not the same across all lenders. Different lenders offer different tenure options based on their internal policies, risk assessment, and the specific loan product. Mostly, all lenders offer tenures ranging from a few months to several years, but the exact range can vary.
5. Does a longer personal loan tenure affect my credit score?
A longer loan tenure itself does not impact your credit score, but timely EMI payments improve it. However, prolonged debt may affect your ability to take new loans.
6. What happens if I repay my loan before the tenure ends?
Early repayment can help you save on interest costs, but some lenders may charge prepayment or foreclosure fees. Check with your lender before making an early repayment.
7. How does my income influence the loan tenure I’m eligible for?
Higher-income allows you to qualify for a shorter tenure with higher EMIs, while lower income may require a longer tenure with smaller EMIs to ensure affordability.
