Personal Loan Tenure

The personal loan tenure is the time gap between the date of loan disbursal and the date of the last EMI payment, it is the duration for which money is provided by the lenders. The minimum repayment period is 12 Months, and the maximum is 84 Months generally given by select lenders.

The personal loan tenure depends on the borrower’s income, credit history, and other needs and factors. But there must be a correlation between loan tenure and EMIs.

Key Factors to Consider for Selecting Personal Loan Tenure

There are various important things affecting personal loan tenure, before selecting the appropriate option for you, Let’s clarify major things.

• Monthly Expenses and Income- You must have a clear picture of your income and expenditure for selecting loan tenure. Analyzing your monthly fixed and variable expenses and comparing them with your monthly income will be helpful in knowing the amount left for (Equated Monthly Instalments) EMIs.

• Include Existing Debts- You must need to include your existing debt obligations in your repayment plan. Pick up a tenure that allows you to pay your current obligation, don’t put the burden on your income.

• Interest Rates for Personal Loan- Your personal loan tenure does not affect your interest rates, but the payment of interest directly affects the tenure of your personal loan. If your tenure increases, you need to pay additional interest on the remaining balance for that added year.

• Loan Amount- Loan amount and tenure have direct relation. If your tenure increases, the borrowing amount will also increase. But banks put restrictions to control loan default with the help of the debt burden ratio (DBR). In DBR you can only pay 40%-60% of monthly income as EMI.

• Personal Loan EMIs- If your personal loan tenure increases your EMI payments automatically decrease. Your personal loan EMI depends on the tenure decided by you. Deciding tenure plays a crucial role in deciding EMI.

• Bank Options for Personal Loan- Different banks have different rules regarding persoanl loan tenures depending on thier internal policy.

Comparison of Tenure between Banks, NBFCs and Fintechs

To select the best loan tenure you need to analyze various alternatives. Many banks, NBFCs, and Fintechs are providing good loan tenure. See the below tables to check loan tenure as of August 2022

BANKS NAME	LOAN TENURE (in months)
IndusInd Bank	12 to 60 months
ICICI Bank	12 to 72 months
Yes Bank	12 to 60 months
Axis Bank	12 to 60 months
SBI Bank	Up to 72 months
HDFC Bank	12 to 60 months
Punjab National Bank	Up to 72 months
Indian Overseas Bank	Up to 60 months
IDBI Bank	12 to 60 months
RBL Bank	12 to 60 months
Bank Of Baroda	Up to 84 months
Union Bank Of India	Up to 60 months

Banks usually provide loans for a longer tenure to make comfortable EMI payments. They avoid providing loans for a very short duration. Banks’ procedures are more rigid than NBFCs and Fintechs.

NBFCs	Loan Tenure (in months)
Muthoot Finance	Up to 60 months
TATA Capital	Up to 72 months
Bajaj FinServ	12-60 months
Money Tap	2 to 36 months
StashFin	2 to 36 months
Dhani Loans	3 to 24 months
HBD Financial Services	12 to 60 months
EarlySalary	Up to 60 months
PaySense	3 to 60 months
MoneyView	Up to 60 months
KreditBee	2 to 10 months

Non-Banking Financial Institutions (NBFCs) policies are more lenient than the Banks’ guidelines. Many NBFCs provides loans for short tenure or for a lower loan amount.

FINTECH’s	Loan Tenure (In months)
Kissht	6 to 24 months
CASHe	Up to 18 months
mPokket	1 to 3 months
SmartCoin	3 to 9 months
Kreditzy	1 to 12 months
NAVI Loan	3 months to 72 months
SalaryDost	6 to 12 months

There are many fintechs that are providing personal loans with competitive interest rates for a short or long tenure. In case you have a bad CIBIL score, you can try to get a loan online from these fintech companies.

Because of flexible policies and fewer formalities people generally prefer to get a personal loan from Fintechs with an attractive loan tenure.

Some FAQs from customers regarding Personal Loan Tenure

1. How can I select the right personal loan tenure?

• Calculate the total personal loan amount as per your requirement.

• Completely understand your monthly income and expenditure.

• Calculate your interest cost to know your total debt.

• Instead of doing calculations manually, use a personal loan EMI calculator.

2. What is the importance of choosing the right loan tenure?

By setting the right tenure you can pay your EMI comfortably, these are the importance:-

• You can easily manage your personal finance effectively with less burden, and you can make focus on other financial goals.

• It makes your credit score higher which will be helpful in creating a positive credit report. In future loan applications, you will get competitive interest rates.

• Reduce chances of having remark of loan defaulter in your CIBIL report.

3. What happens if I repay the complete loan before tenure?

Yes, you can pay off your loan completely before the completion of your tenure. But, you may have to pay pre-payment charges. First, you calculate, If pre-payment is convenient for you, you can go for it.

4. Is it possible to get a personal loan for more than 5 years?

Mostly Banks, NBFCs, and Fintechs provide personal loans for 5 years. But some lenders are providing loans for more than 5 years (up to 7 years).

5. How can I enhance my personal loan tenure?

• You need to submit a written request application with genuine reasons to the lenders to extend the tenure.

• You can transfer your personal loan balance to other lenders. By transferring your personal loan balance to another lender you may opt for higher tenure.

Point To Remember

• Personal loan tenure is the total time interval that you take to repay the complete loan.

• You can exceed your personal loan tenure by writing a written application to the current lender.

• You need to pay your total loan in tenure selected by you. Otherwise, any delay in payments attracts a penalty.

• The interest cost and the personal loan tenure is directly proportional to each other. The more time you will take to repay the loan, the more interest you should need to pay.

• For estimation you can use an online personal loan EMI calculator. It provides you with complete estimation in less time.