In recent times, a personal loan has become a popular financing option. Going by the number of phone calls, emails and messages that we receive from lenders offering loans, one is inclined to believe that there is a lot of demand for these loans. As the term suggests, a personal loan is not linked to a particular product or purpose. It is a general, all-purpose loan that you can use for whatever requirements you think fit. The most convenient part of the personal loan is the absence of collateral, minimal paperwork and fast processing which is making it the go-to financing option for millennials who are hard-pressed for time. The fact that it works out cheaper than your credit card adds another feather to its cap. Let us try and understand everything that you need to know about Long-Term personal loans.
What do you mean by Long term or Short term loans?
A short term loan is defined as one having a repayment tenure of up to12 months. Any loan that is taken for more than 12 months is considered a long term loan. Personal loans that have a repayment tenure between 12 to 60 months or above are classified as long-term personal loans.
What are Personal Loans?
Personal Loans are unsecured loans that can be used as a financing option to meet any need like education expenses, a foreign holiday, medical emergency, wedding expenses, buying a big-ticket consumer durable etc. Personal loans can come with a repayment tenure of up to 5 years.
What are Long-Term Personal Loans?
Long -Term personal loans are loans that have a repayment tenure of greater than 12 months. However, some lenders offer personal loans of longer tenure as well. This could be for expenses like higher education, renovation of house etc.
What are the advantages of Long-Term Personal Loans?
A loan is taken to tide over a financial crisis. If the amount of EMI you can repay needs to be affordable, you may need a longer-term loan. The amount of EMI for a long term loan is relatively smaller than that of a short term loan. The advantage of a personal loan is that it does not demand any collateral. However, you have to bear in mind that the longer the tenure, the longer the time period for which you would be paying interest.
Can I get a Long -Term Personal Loan from LoanTap?
Loan Tap offers convenient personal loans for tenures up to 5 years. You can borrow any amount varying from Rs 50000 to Rs 10 lakh. You can check out the flexible repayment options available to further lower the EMIs.
Who is eligible to get a Long-Term Personal Loan?
You are eligible for LoanTap long term personal loan, If you are –
- an Indian citizen/resident who is over 21 years of age
- earning a minimum monthly income of Rs 30000
- having steady employment or source of income
What is the process for availing of a Long-Term Personal Loan?
The process for availing of a personal loan at LoanTap is very simple. All you need to do is fill up an online application and upload the necessary documents. Once the documents are verified and the KYC is complete, the loan amount is instantly disbursed to the borrower’s account. The entire process takes 24-36 hours.
What documents are needed to avail a Long Term Personal loan?
The documents required to process a loan application include
- PAN card
- Address Proof
- 3 months Salary Slip
- 6 months bank statement of the salary account
- e-NACH mandate
What are the Repayment Options available?
The convenience of availing of a loan from LoanTap is the flexibility of options available. There are varied options available to pick from. LoanTap has designed a variety of repayment schedules to assist borrowers to pick the plan that best fits their monthly cash flows. This helps the borrower to tailor his/her repayment schedule after taking into account their payday, monthly expenses etc. There are several options like a Step up, EMI free, Term and Overdraft repayment.
What is the implication of Prepayment on Long-Term Personal Loans?
At LoanTap, if you choose to prepay or foreclose your loan after 6 months no charges are applicable. However, Minimum charges are levied during the lock-in period.
Does a Long-term Personal Loan impact the Credit Score?
A long-term personal loan does not impact the credit score unless you default on the repayment. Having a personal loan helps to build your credit history. Although it may impact your score by a notch initially, over the long run, if your payment history is clean, it will improve your credit score.
Conclusion
A long-term personal loan is a financing option that can be used to meet urgent fund requirements. Based on your monthly cash flow, a term longer than 12 months can be selected. However, it should be remembered that loans come at a financial cost and should be taken only when the situation demands it. Access to an instant personal loan is not an extension of your paycheck and should not be treated as one. Credit is meant to be used responsibly and paid off when you have excess idle cash. It is merely a bridging option to tide over a temporary cash crunch.
Related blog – Should I Choose a Long-Term or a Short-Term Tenure for my Loan?
