A sudden expense can arise at any time, and many people find themselves in a tight financial situation. Your only option in these situations is to take money from a bank, a close companion, or a relative. Since you don’t want to sour things with your relatives and family, you might prefer to borrow money from a bank.
You can get help in this situation using personal loans. Despite the advantages of personal loans, borrowing responsibly requires a thorough understanding of all terms and conditions, including loan tenure.
The duration of a personal loan is crucial in determining what you pay each month. This additionally helps in defining your financial obligations and figuring out the total cost of borrowing.
Is it difficult for you to choose a suitable term for a personal loan? Selecting a suitable duration is essential when submitting a loan application. This is because the interest you pay goes up over a longer period. Due to the hefty EMIs, a shorter period may result in financial hardship. Continue reading to learn about the minimum and maximum terms for personal loans.
Understanding the personal loan’s minimal and maximum terms is very important. However, what are the exact minimum and maximum terms for personal loans? To comprehend all of these concepts, read attentively.
What Do You Mean by a Personal Loan?
A personal loan is a loan that you take out for personal use from a bank or non-banking organization. There is no need for security for these unsecured loans. Rather, your earnings and credibility are used by lenders to determine your eligibility for and interest rates on personal loans.
To meet your immediate financial demands, you might apply for an unsecured personal loan. The ultimate use of the funds is without restrictions.
The funding is granted to you upfront, and the interest rate on personal loans is fixed. The instalments each month cover the payback. The loans might be used for summer breaks, marriages, or education.
What Advantages Do Personal Loans Offer?
The finest financial choices for dream weddings, international travel, and educational opportunities abroad are personal loans. Additionally, for debt consolidation, emergency medical care, and home renovations, personal loans are the smartest choice. There are countless ways to use immediate personal loans.
With benefits like debt consolidation, covering unforeseen bills, or paying large purchases, a personal loan can be of great help.
In Addition to This, a Personal Loan has the Following Additional Advantages:
- Little Documentation
The final thing that you need is a ton of paperwork when applying for a loan. Minimal documentation is needed for a personal loan.
Only necessary paperwork, such as proof of identity, proof of address, and a statement of income, is required by lenders. This entails spending more time paying attention to your financial objectives and less time doing documentation.
- Fixed Loan Tenure
Managing your finances requires having a solid plan for spending and understanding what to expect. For this, a personal loan can be useful. It indicates that you have ample time to pay back the loan and are aware of the specific time of completion.
Because you only have to pay the same amount every month for the entire term of the loan repayment, this simplifies money management.
- Low Loan Interest Rates
Compared to credit cards, personal loans frequently have cheaper interest rates. If you’re struggling with high-interest debt, you may minimize interest by repaying your loan.
- Debt Relief
Debt consolidation with personal loans is an option if you have several high-interest bills, such as debts on credit cards. Your total interest costs can be decreased and your finances made simpler by consolidating all of your debts into just one, lower-interest personal loan.
- Fast Fund Access
Generally speaking, personal loans are approved more quickly than other types of loans. This implies that you will be able to get the money you require fast, which may be very helpful in an emergency or when you want to take advantage of a chance opportunity.
What is a Personal Loan’s Maximum Loan Term?
The length of time that a personal loan can be taken out depends on the lending institution. One important factor in assisting you in managing more economical monthly installments is the payback time. A personal loan can have a maximum term of around 60 months (5 years). Nevertheless, certain lenders might increase this time frame to 84 months, or even up to 7 years.
Choosing a longer loan term may seem like a wise decision, especially if your monthly earnings are low. This reduces the possibility of experiencing severe financial hardship. Additionally, it guarantees that you will be able to make your repayments on time.
Long-Term Personal Loan Highlights 2024
| Bank/Institution | Minimum Salary per Month | Loan Amount | Loan Tenure | Interest Rate |
| PaySense Personal Loan | 20.00 k | 50.00 k – 10.00 Lacs | 6 Month – 60 Month | 18% – 22% |
| Money View Personal Loan | 15.00 k | 5.00 k – 5.00 Lacs | 3 Month – 60 Month | 17% – 36% |
| IDFC Bank Personal Loan | 20.00 k | 1.00 Lacs – 40.00 Lacs | 12 Month – 60 Month | 10.49% – 22% |
| Incred Personal Loan | 15.00 k | 50.00 k – 10.00 Lacs | 24 Month – 60 Month | 16% – 33% |
| Aditya Birla Personal Loan | 20.00 k | 1.00 Lacs – 50.00 Lacs | 12 Month – 84 Month | 12% – 28% |
| Finnable Personal Loan | 20.00 k | 50.00 k – 10.00 Lacs | 12 Month – 60 Month | 16.95% – 30% |
| Hero Fincorp Personal Loan | 15.00 k | 50.00 k – 10.00 Lacs | 12 Month – 60 Month | 9.5% – 16% (Flat) |
| Muthoot Finance Personal Loan | 20.00 k | 1.00 Lacs – 7.50 Lacs | 12 Month – 60 Month | 14% – 22% |
| Tata Capital Personal Loan | 25.00 k | 75.00 k – 25.00 Lacs | 12 Month – 60 Month | 10.5% – 14.25% |
| Standard Chartered Personal Loan | 50.00 k | 1.00 Lacs – 1.00 cr | 12 Month – 60 Month | 11.49% – 20% |
| Bajaj Finserv Personal Loan | 38.00 k | 1.00 Lacs – 35.00 Lacs | 12 Month – 84 Month | 13.5% – 15% |
| Axis Bank Personal Loan | 25.00 k | 1.00 Lacs – 40.00 Lacs | 12 Month – 60 Month | 11.15% – 16.25% |
| ICICI Bank Personal Loan | 40.00 k | 1.00 Lacs – 1.00 cr | 12 Month – 72 Month | 10.5% – 15% |
| Fullerton Personal Loan | 25.00 k | 1.00 Lacs – 25.00 Lacs | 12 Month – 60 Month | 14% – 32% |
| HDFC Bank Personal Loan | 25.00 k | 1.00 Lacs – 1.00 cr | 12 Month – 72 Month | 10.25% – 16% |
| Flexsalary Personal Loan | 8.00 k | 4.00 k – 2.00 Lacs | 6 Month – 60 Month | 1.5% – 3% (Fixed) |
| Kotak Bank Personal Loan | 25.00 k | 1.00 Lacs – 50.00 Lacs | 12 Month – 60 Month | 10.75% – 22% |
| Cholamandalam Personal Loan | 20.00 k | 1.00 Lacs – 35.00 Lacs | 6 Month – 60 Month | 14% – 22% |
| SBM Personal Loan | 20.00 k | 50.00 k – 25.00 Lacs | 6 Month – 60 Month | 14% – 20% |
| Axis Finance Personal Loan | 50.00 k | 1.00 Lacs – 50.00 Lacs | 12 Month – 60 Month | 14% – 16% |
| Shri Ram Finance Personal Loan | 25.00 k | 1.00 Lacs – 25.00 Lacs | 12 Month – 72 Month | 13% – 16% |
What is a Personal Loan’s Minimum Loan Tenure?
The minimum loan term may vary depending on the lending organization and your financial circumstances. Some lenders have minimum terms, but others could offer personal loans with as little as a three-month term. Different lenders provide personal loans with varying terms of payback.
A personal loan’s minimum term is normally one year (12 months), and lenders don’t often provide terms less than this. In addition, a lock-in term of three or six months is typically imposed by lenders. In this period, the borrower is not allowed to close the loan or make prepayments.
Short-Term Loan Highlights 2024
| Bank/Institution | Minimum Salary per Month | Loan Amount | Loan Tenure | Interest Rate |
| PaySense Personal Loan | 20.00 k | 50.00 k – 10.00 Lacs | 6 Month – 60 Month | 18% – 22% |
| Money View Personal Loan | 15.00 k | 5.00 k – 5.00 Lacs | 3 Month – 60 Month | 17% – 36% |
| Upward Fintech Personal Loan | 20.00 k | 25.00 k – 5.00 Lacs | 6 Month – 36 Month | 18% – 32% |
| Cashe Personal Loan | 12.00 k | 10.00 k – 4.00 Lacs | 4 Month – 4 Month | 1.5% – 3% (Fixed) |
| Finzy Personal Loan | 25.00 k | 1.00 Lacs – 10.00 Lacs | 6 Month – 36 Month | 10.99% – 18.99% |
What Factors Should You Check While Selecting the Tenure of a Personal Loan?
A few crucial factors need to be taken into account when choosing the duration of your loan. They are listed in the following order:
- The Monthly Spending Plan
Your monthly earnings and expenditures must be taken into account. High monthly expenses for a shorter duration can have a greater negative impact on your budget. To gain a clear picture of your monthly spending plan, you may also utilize a personal loan EMI calculator.
- Rate of Interest
The length of the loan may affect the interest rates for personal loans. Since longer terms frequently have higher interest rates, your monthly payments may increase over time. 3. Monetary Objectives
You need to think about your financial objectives. To pay off debt more quickly, a shorter term might be preferable. A longer-term can be appropriate if you require fewer monthly instalments to meet other financial objectives.
- Options for Prepayment
Verify whether the lender permits penalty-free early repayment. Select a longer loan term if you can pay it off early. Pay it off sooner if your financial circumstances improve. - Loan Objective
You need to consider why you chose to take out the loan. For an unforeseen need, such as a getaway, short-term travel can be suitable. For bigger goals like home improvement, a longer duration might be preferable. - Your Age and Future Plan
Remember your age and your intentions. A shorter term may be better if you are getting close to retirement so that you can make sure you have no debt when you leave your job. Younger people might be more flexible in selecting a longer term.
Bottom Line
One crucial choice that can have a big impact on your financial situation is the loan term you select. By investigating the maximum and lowest loan terms, you will learn how crucial it is to customize this decision to your situation and objectives.
You may choose a long duration to easily handle the loan. Understanding the duration of your loan is essential before making a decision. Because it affects your total financial situation.
You should make this decision after taking your financial status, long-term objectives, and immediate requirements into account. A reasonable EMI must be balanced with the total amount of interest that must be paid during the loan term.