Vikrant Shekhawat : Oct 13, 2024, 06:00 AM
Personal Loan: As the festive season approaches, many people consider taking a personal loan to meet their needs. Whether it is home decoration, holiday planning, or other essential expenses, a personal loan can be an easy solution. However, it is very important to consider one important aspect before taking a loan, and that is the loan tenure. By choosing the right loan tenure, not only can you manage your EMIs, but you can also save on interest rates. Let's know how choosing the loan tenure can benefit you.Short-term personal loan: Benefits and featuresShort-term personal loans usually range between 10 to 12 months. It is best suited for people who need a small amount and are in a position to repay the loan quickly. Let's know some of its important benefits:Low interest rates: Interest rates on short-term loans are usually low, which can help you save a lot on the total payment.Early loan settlement: If you have a good income and can repay the loan quickly, then this option can prove to be very beneficial for you.Balanced budget: By settling the loan in a short period, you can avoid the burden of debt in the long term and keep your financial situation balanced.Long-term personal loan: When to choose and its benefitsA long-term personal loan, which is usually for 1 to 5 years, can be a better option for those who need a large amount and want to repay the loan gradually. Following are some of its benefits:Lower monthly installments (EMI): In a long-term loan, your monthly installments are lower, which puts less pressure on your budget.Gradual payment: If you cannot pay a large amount at once and want to repay the loan in monthly installments according to your income, then this option can be better for you.Higher interest in long term: However, the interest rates on long-term loans are higher, due to which the total interest amount can also be higher. Hence, it is extremely important to keep this aspect in mind.Points to consider while choosing a loan tenureWhen you are choosing your personal loan tenure, keep the following points in mind:Loan purpose: Decide the purpose of the loan. For instance, if you are taking a loan for a vacation, a short-term loan would be better. On the other hand, for long-term purposes like home renovation or higher education, a long-term loan would be suitable.Income and expenditure assessment: Assess your monthly income and expenses properly. Short-term loans have higher EMIs, so before choosing one, see how it is affecting your budget.Interest rate impact: Understand that short-term loans have lower interest rates, while long-term loans may have higher interest rates. This may affect your total repayment, so keep the interest rate in mind while choosing a loan tenure.Conclusion: Choose the right loan tenureIt is very important to choose the right loan tenure before taking a personal loan. If you manage it correctly, you can not only save interest on your loan but also keep your monthly EMI balanced. Choosing the right loan according to your needs during the festive season will improve your financial situation and save you from unnecessary financial burden.