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Interest Rates vs Tenure - Which plays an important role for your Personal Loan EMI
Mumbai, November 19, 2020
A personal loan becomes very important at times for one to fulfill their goals and dreams. A personal loan can be highly beneficial in times of a medical emergency, in business, as well as for higher academics. In times of the ongoing pandemic, a personal loan has become particularly essential.
What are the factors that affect a personal loan EMI?
The equated monthly installment or EMI is a fixed amount of money that is to be paid in order to clear the outstanding loan amount. A personal loan EMI calculator should be used to be sure of the payments that are required to be made. There are several factors that are to be considered while looking for a personal loan. The loan amount, the personal loan interest rates and the personal loan tenure are the three factors that play a very important role when it comes to personal loan EMI:
1. Loan amount: The loan amount is the entire amount of money that is being borrowed by an individual
2. Personal loan interest rates: The personal loan interest rates are the rates of interest at which an individual borrows the loan amount
3. Personal loan tenure: The personal loan tenure is the time period within which the borrower is supposed to make the repayment to the lender
It is advisable to calculate their EMI using a personal loan EMI calculator. A personal loan EMI calculator would provide one with the specific amount of money to be paid every month of the tenure.
How are personal loan interest rates affected?
● A higher credit score would mean a better chance of lower personal loan interest rates
● A lower DTI or debt-to-income ratio would mean a lower rate of interest.
How does the personal loan tenure affect the EMI?
● If the personal loan tenure is increased, the EMI will get reduced as a result.
● A shorter personal loan tenure, on the other hand, would mean an increase in the EMIs.
● Depending on the capacity of repayment, the tenure of the personal loan is decided.
Personal Loan Interest Rates and Personal Loan Tenure
While personal loan tenure would not affect personal loan interest rates directly, the interest that is to be paid does affect the personal loan tenure. If one is thinking of availing a personal loan, it would be important to remember that an increase in the personal loan tenure would automatically mean that the personal loan interest rates apply for a longer period of time.
There are several other factors that are to be considered while taking a personal loan:
● Eligibility criteria: The eligibility criteria for a personal loan includes the personal details of the borrower, their job details, and bank statements.
● Additional charges: There are, in certain cases, additional charges associated with a personal loan in the form of pre and/or part payments.
● Quick online procedure: A fast and efficient online application is very important while applying for a personal loan as it reduces the hassles of visiting the office in person and carrying the documents.
● Collaterals: Collaterals come into play while taking a secured personal loan where the loan is backed by an asset that the borrower is required to provide.
● Offers and value-added services: It is best to take a look at multiple personal loans in order to figure out which one comes with best offers and value-added services
(Disclaimer: This is branded content. Readers are advised to exercise due diligence and discretion before entering into any correspondence, investment, purchase, business dealings or any other decision on the basis of this content.)