Long Term Personal Loan: Meaning, Benefits, & Tenure

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.

• 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.

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.

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?

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.

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

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.

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.

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.

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 .