Short-term Personal Loan and Long-term Personal Loan
As we know Personal Loan is one of the unsecured loans, which means you don’t have to put anything as security to fetch funds. The loan usually comes with the higher interest rate. Banks usually ask for your income proof and credit score. Your credit scores play a major role when it comes to availing a personal loan. An applicant with a good score gets the loan instantly and with reasonable interest rate whereas an applicant with bad credit score either get a loan with a higher interest rate or bank will reject the application. Here you need to check the difference between short-term and long-term personal loan.
Short-term personal loan:Loan with tenure of one year is known as a Short-term loan. Before applying for a loan we run our vision to the interest rate. The personal loan usually comes at the higher interest rate and you need to put any collateral. Many lenders in India nowadays give personal loans at an interest ranging between 12% and 20% p.a. numerous lenders give a lower interest rate for short-term loans. That’s why nonpayment’s risk generally increases over time. If you go for shorter repayment tenure, it can reduce your loan’s default risk. You can easily get short-term loans. In a single working day, the bank sanctions you this loan which makes a short tenure. The loan is one of the best options for those, who’re looking for instant funds.
Long-term personal loan:Loan with tenure of over 3 years is known as a Long-Term loan. In India, lenders give personal loans with at tenure more than 5 years. Most people are fond of long-term repayment tenure for home loans. The loan usually comes with a higher interest rate, which means, at last, you will finish up paying more from your wallet. Before applying for a loan, you can take help of personal loan calculator so you can figure out your monthly payments. Through this calculator, you will come to know your EMI estimate based on the loan sum, duration, rate of interest etc. In a long-term loan, you need to put the collateral. Home loans are one of the most common long-term loans are in India.