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Which One Should You Go For - Short Term or Long Term Personal Loan?
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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
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Personal loans have become a go-to option to fund your various needs. It does not have end-use and so can be used for multiple purposes. The ease of availability and quick disbursal add to its benefit, making it a preferred option whenever someone needs funds. However, as it is quickly approved, often people end up miscalculating things and avail a wrong tenure.
You know that your choice of tenure can affect your EMI amount. Typically, a personal loan is offered for 1 to 5 years. The longer your tenure, the lower your EMI and vice versa. However, a longer tenure means you spend more time under the debt. Lenders allow you to choose the tenure as per your financial comfort. Unless you know which one is better, short tenure or long tenure, it could be challenging to make the right choice. For better understanding, go through the details below.
What Is a Short-term Personal Loan?
Long-term Personal Loan
The best way to choose between a short and long tenure is to assess your finances and needs. If you can pay a higher EMI comfortably, you can opt for a short tenure, and save on interest costs. However, if you have other commitments and want time to repay, you can opt for a longer tenure. Whatever tenure you choose, ensure that you check your affordability and eligibility before you apply for an instant personal loan.
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