2. Loan Tenure and Repayment Terms
Understanding the repayment period is essential. Personal loans typically range from 12 to 60 months, and the tenure you choose affects your Equated Monthly Installments (EMIs). A shorter tenure leads to higher EMIs but reduces the total interest paid. Conversely, a longer tenure lowers your monthly EMI but increases the overall cost due to accrued interest.
Review the loan agreement carefully to identify any clauses about repayment flexibility. Some lenders charge penalties for early repayment, which could negate any interest savings. Look for loans that offer flexibility without heavy fees.