Can A Personal Loan Tenure Be 10 Years Long?
Loans solve a variety of financial problems, be they personal or business-related. Not only do they provide monetary support, but they also help build confidence and financial liberty. Out of the various loans, personal loans cover the diverse needs and requirements of an individual.
Personal loans help cover all types of personal needs, such as financing a marriage, funding higher education, or even making a down payment. The interest rates charged on these loans are lower. They also give borrowers greater flexibility. The tenure of a personal loan varies from 12 months to 84 months.
Can you further increase the tenure of your personal loan? In this article, you will learn the meaning and significance of personal loans, their features, and their benefits. You will also learn if you can use them for 10 years.
Personal Loans: Meaning, Purpose, and Significance
As the name suggests, a personal loan is a type of loan that you borrow to meet your personal needs. These include buying a house, financing a wedding, making a down payment, etc.
These types of loans are unsecured, which means you don’t have to pledge your assets and use them as collateral. You only have to repay the loan amount in instalments. These instalments are calculated monthly for a fixed tenure, determined by your lender.
The rate of interest on a personal loan is charged based on your credentials, like repayment history, credit score, employment status, etc. In most cases, the maximum tenure up to which a personal loan can be stretched is 7 years. On top of that, not every lending institution allows borrowers a 7-year tenure.
Benefits of a Personal Loan Over Other Loans
There are several benefits to choosing a personal loan over other types of loans:
- Quick disbursal
The disbursal period for a personal loan is, most of the time, within a day or two. The reason for this is that the entire verification and paperwork process is comparatively short. As everything is hassle-free and convenient for the borrower, the disbursal period condenses to 1 to 2 days.
- A higher loan amount
The loan amount for a personal loan can also be high at times, depending on your credentials and your capacity to repay. The principal amount can easily go from Rs. 20 lakhs to Rs. 30 lakhs or even Rs. 40 lakhs in some cases.
- Appealing rate of interest
Most lending institutions, be they banks or NFBCs, charge a low rate of interest on personal loans. The rate of interest ranges from 8% per annum to 25% per annum, depending on your creditworthiness.
- Flexible tenure
The tenure of repayment of a personal loan is flexible and mostly ranges from 12 months to 84 months. You have to repay your loan amount within this period in the form of EMIs.
- There is no requirement for collateral
Many people are not able to get loans because they lack property or shares that they can pledge for the principal amount. However, since a personal loan is an unsecured form of loan, you don’t need to pledge your assets for the principal amount. You can get the lump sum even if you lack property or any other assets that you could have used as a guarantee against the loan.
- Easy eligibility
The minimum requirement stated by banks and other lending institutions to qualify for a personal loan is simple. You need to belong to a certain age group, have a desirable income with some years of work experience, and have a decent credit score.
Is it possible to get a personal loan for 10 years?
It is quite impossible, in most cases, to get a personal loan for a tenure of 10 years. Since these loans are unsecured, the borrowers pose a certain level of risk to the lenders.
Also, borrowing a personal loan with a long repayment term questions your financial muscle and your capacity to repay it. Even if you have a high credit score, you can stretch the loan period to a maximum of 7 years, provided you have no other liabilities.
Even a financial corporation like Piramal Finance, which provides pocket-friendly EMI options, a hassle-free process, and no prepayment or foreclosure charges, can provide you with a personal loan for about 12 to 60 months at most. In the case of other lenders, under certain circumstances, the tenure can last up to 84 months but can’t be extended further.
However, it is also important to know that the shorter the tenure of repayment, the less strain it will put on your financial muscles. If you opt for a higher loan tenure, you have to pay Rs. 50,000 to Rs. 1,00,000 more than when you go with a tenure of 1 to 2 years less.
Personal loans can cover an array of requirements, but you cannot opt for them for more than 84 months. The simple reason is the risk factor that you pose to your lending institution.
Also, it is important to know that a longer term of repayment is going to put further strain on your financial muscles and your budget, as you will be subjected to paying a higher amount.
If you want to read more about personal loans, check out similar blogs on the Piramal Finance website.
Also Read: How to Check Personal Loan Eligibility Criteria Online at Piramal Finance?
More articles for you
Here are 9 types of home loan you can avail in India
Unseen Factors That Affect Your Personal Loan Interest Rate
How Does Getting A Machine Loan Can Help You Grow Your Business?
How to get personal loan without income proof
Gold ETF vs Sovereign Gold Bond vs Physical Gold
Simple Systematic Investment Plan (SIP) Calculator
How to Buy Unlisted Shares in India
Four Types of Loans that Help you Avail Tax Benefits
Step-by-step Guide on How to Get Car Insurance Onlne in India