A personal loan can be helpful to counter the uncertainties posed by unforeseen expenses beyond a person’s control. It is commonly known that personal loans come with a flexible tenure and competitive interest rates. Long-term personal loans increase the loan’s tenure giving to the borrower the flexibility of repaying it with ease.
Read on to know more about long-term personal loans and how you can get one with flexible repayment terms.
What is a Long-term Personal Loan?
A personal loan is an unsecured loan with a tenure of up to 5 years. There is no need to provide any collateral to secure the loan. It can meet different expenses such as medical costs, college fees, trips and vacation costs, wedding expenses, and buying consumer durables.
Personal loans with a tenure (repayment period) of more than 2 years are long-term personal loans with a lower interest rate than short-term personal loans. It is because the loan is being repaid over a longer period.
How to Get a Long-term Personal Loan?
Long-term personal loans can be useful when you want to obtain the loan amount at a shorter notice but seek a longer repayment period. By following some key points, you can get the loan that meets your expenses.
- Loan Eligibility
You should first check your eligibility for a long-term personal loan. The following factors describe borrower eligibility:
Age: When applying for this loan, your age must be between 21 and 60 years at the time of loan maturity.
Residence: You must be an Indian resident.
Income: You need to have a stable income source and employment.
Documents: You must possess the required documents of proof required by the lending institution for the successful processing of your loan application.
- Loan Amount
Once you have determined your eligibility for getting the loan, you have to assess the loan amount. It is an essential assessment since you will pay this amount back with considerable interest. The amount you want will also determine the EMI amount you will have to pay. A lower-valued loan will have lower EMIs than a higher-valued loan. Even if you require a high amount, checking an online personal loan EMI calculator can help you gauge whether you can pay the EMIs.
- Credit Score
Your credit score is an important factor every lending company will consider while deciding on approving or rejecting your loan. A low credit score shows the inability to repay the loan or a high possibility of defaulting on it. Ensure your credit score is good enough to secure a personal loan. A good score is also helpful in lowering the interest rate. The score ranges from 300 to 900 and is given by credit bureaus such as CIBIL based on your repayments in the past.
- Interest Rate
In the case of any loan, interest rates make a big difference. Interest rates are determined based on the applicant’s financial history, income, and other factors. You should look for a lending company that charges the most competitive interest rate. Long-term personal loans have lower EMIs than short-term loans, but a high-interest rate can considerably increase the repayment.
- Repayment Tenure
The repayment term is crucial for making timely EMI payments without missing any. When repaying the loan, the availability of funds will determine how comfortable you are with the decided term. A shorter term will involve a higher EMI, whereas a longer term will have a lower EMI. Get an idea of your finances and if you can continuously pay the EMIs.
Using an online personal loan EMI calculator will also help understand which repayment term suits you best. Even in long-term personal loans, any variation in the repayment term can affect the EMIs. It can determine how heavy the financial burden will be. Getting a term you are comfortable with will let you repay your loan with minimal difficulties.
Complete the Process
For the successful processing of long term personal loans, completing the entire process is vital.
- Make an online application or apply for the loan at the branch of the lender you want.
- Submit all the required documents.
- Wait for your documents and information, like your credit history, to be verified.
- If you meet the criteria of the lender, your loan will be approved.
- Once you get the approval, the lending company will arrange for the disbursal of the loan amount.
Before finalising the paperwork, it is best to check all the documents and requirements. When the loan amount is received, you can use it as you like.