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- Key Highlights:
- What are Long-term Personal Loans?
- Long-term Personal Loans: Features and Benefits
- Long-term Personal Loans: Disadvantages
- Long-term Personal Loans: Eligibility
- Documents Required for a Long-term Personal Loan
- How Can I Apply for a Long-Term Personal Loan?
- Long-term Personal Loans: Fees and Charges
- Long-Tenure Personal Loans: Make Your Dreams a Reality
- FAQS - FREQUENTLY ASKED QUESTIONS
Long-term personal loans are beneficial if you want to pay small equated monthly installments (EMIs) spread over a longer duration. Longer personal loan tenure can be an effective way to reduce your monthly financial burden.In this blog, you will learn about long-term personal loans , long personal loan tenure , their advantages and disadvantages, your eligibility for a long-tenure personal loan , etc.
Key Highlights:
- A long-term personal loan reduces your monthly EMI burden by spreading the debt over a longer period.
- A longer personal loan tenure ranges from 3 to 7 years.
- You can select longer personal loan tenure according to your financial goals.
- To suit your financial goals and needs, you can choose a regular term loan, a flexi-term loan, or a flexi-hybrid personal loan.
What are Long-term Personal Loans?
Long-term personal loans are unsecured loans you can avail yourself of for a longer term to fulfil your personal goals like home renovation, wedding ceremonies, family vacations, etc.While a longer personal loan tenure reduces monthly EMIs, it is more expensive to your pockets than a shorter personal loan. With longer personal loan tenure , you have to pay extra interest amount.Therefore, you are advised to calculate your EMI liabilities using Aditya Birla Capital's personal loan EMI calculator and choose an affordable personal loan. It offers the longest-tenured personal loan of up to 7 years to help you select a plan that aligns with your financial needs and goals.
Personal Loan Tenure
Generally, long-term loans, also called term loans, have a repayment period of 5 years and above. Examples include home loans, mortgage loans, and others. However, a personal loan tenure of 3 years and above is also considered a long-term personal loan. Examples include loans for higher education, medical emergencies, debt consolidation, home renovation/reconstruction, etc.
Long-term Personal Loans: Features and Benefits
Some of the key features/benefits of long-term personal loans are:
Flexible Repayment Tenure
You can select a flexible repayment tenure from 3 to 7 years. This helps you manage your finances according to your goals and financial obligations.
Flexible Repayment Mode
You can select a longer personal loan tenure with three repayment modes: Term, flexi-term, and flexi-hybrid loans.A term personal loan is a regular loan where you repay the principal and interest with fixed, predecided EMIs.With a flexi-term personal loan , you can withdraw funds as needed and repay them when you can, with the added benefit of interest being charged only on the utilised amount. Aditya Birla Capital offers flexi personal loan tenure of up to 7 years with no partial repayment charges.With the Flexi-hybrid loan , you can defer the principal repayment for the first few years of the whole loan tenure and repay only the interest. This helps you reduce the initial EMI burden.
No Collateral/ Guarantee Required
Long-tenure personal loans do not require you to provide any collateral and, thus, are faster to approve than secured loans. They can be handy in case of medical emergencies due to faster disbursal. Also Read: Long-Term vs Short-Term Personal Loan: Which One Is Better For You?
Long-term Personal Loans: Disadvantages
Some disadvantages of long-term personal loans are:
Over-borrowing Risk
Longer personal loan tenure s can lead you to borrow more than necessary.
Longer Liability
These loans bind you to an extended duration, limiting your financial freedom.
Higher Interest Liabilities
With a longer personal loan tenure , you can pay significantly higher interest due to compounding.
Economic Changes
Economic fluctuations like the Repo Rate increase may cause you to pay a higher interest on your loan.
Long-term Personal Loans: Eligibility
You are eligible for a long-term personal loan if:
- You are an Indian citizen.
- You are a salaried employee.
- You are between 21 and 60 years of age.
- You have a CIBIL (Credit Information Bureau India Limited) Score of 750 or above.
Know More: Boost Your CIBIL Score With The Help of Personal Loan Online
Documents Required for a Long-term Personal Loan
To get a long-term personal loan, you must have the following documents:
Identity Proof:
Passport / Aadhaar Card / Voter's ID / Driving License / Job Card issued by NREGA / Registration certificate / PAN (permanent account number) card.
Address Proof:
Passport / Aadhaar Card / Voter's ID / Driving License / Job Card issued by NREGA (National Rural Employment Guarantee Act) / Registration certificate.
Income Proof:
The last three salary slips with all deductions and Form 16.
Bank Statement:
The last six months' statement of a salary-linked bank account.
Other Income Proof:
If applicable.
How Can I Apply for a Long-Term Personal Loan?
You can apply for a long-term personal loan by following these simple steps:
- Visit the lender’s website .
- Determine your needs, such as loan amount, repayment tenure, etc.
- Check your eligibility.
- Calculate your monthly EMI using a personal loan EMI calculator .
- Submit the necessary documents.
- Apply for a personal loan.
Long-term Personal Loans: Fees and Charges
Fees and charges for a long-term personal loan vary by lender. You should compare various fees levied by the lender on a personal loan. These charges include processing fees, pre-closure fees, bounce fees, part-prepayment charges, etc.
Long-Tenure Personal Loans: Make Your Dreams a Reality
Availing of a longer personal loan tenure allows you to spread your financial liabilities. You can choose a tenure that suits your current financial situation and obligations. However, these loans are expensive compared to a shorter-tenure loan. It is important to conduct thorough research to compare the advantages of a long-tenure personal loan .
FAQS - FREQUENTLY ASKED QUESTIONS
What is a long-term personal loan?
A long-term personal loan is a financing solution where you can repay the principal and interest after 3 to 7 years.
Should I choose a longer personal loan tenure?
You should choose a longer personal loan tenure to reduce your initial EMIs. However, remember that these loans are more expensive than shorter-tenure loans.
Which bank gives maximum tenure for a personal loan?
Most banks and non-banking financial institutions (NBFCs) like Aditya Birla Capital offer a maximum personal loan tenure of 7 years.
For what purposes can I avail of a long-term personal loan?
You can avail of a long-term personal loan for significant expenses such as home renovation, medical emergencies, marriage, debt consolidation, and family vacations.
Can I apply for a longer personal loan tenure jointly?
You can apply for a longer-tenure personal loan individually or jointly with a family member, such as your spouse or parents.
What minimum amount can I borrow as a longer personal loan tenure?
You can borrow a minimum of ₹50,000 for a long-term personal loan.
How can I increase my eligibility for a higher personal loan amount?
Applying with a higher-income co-borrower can increase your eligibility for a higher personal loan amount.
What are the benefits of a Flexi-term personal loan?
With a flexi-term personal loan, you can withdraw funds as needed and repay them when you can. They charge interest only on the utilised amount.
What should be my CIBIL score to avail of a longer personal loan tenure?
To be eligible for a long-term personal loan, your CIBIL score should be 750 or above.
How can I improve my CIBIL score to get a personal loan?
You can improve your CIBIL score by paying your EMIs and credit card bills on time, limiting your credit utilisation ratio, paying existing debts, etc.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
