When taking out a loan, most people focus on the interest rate and EMI amount. But an equally important factor often overlooked is the loan tenure — the length of time over which you repay the loan. The tenure you choose directly affects both your monthly EMI and the total amount you repay to the lender.
At Vizzve, we help borrowers understand these dynamics so they can make smarter financial decisions.
What Is Loan Tenure?
Loan tenure is the duration over which you agree to repay your loan. For example, a personal loan may have a tenure of 1 to 5 years, while a home loan might stretch to 20 or 30 years.
Impact of Loan Tenure on EMIs and Total Repayment
Shorter Tenure = Higher EMIs but Lower Total Interest Paid
When you opt for a shorter repayment period, your EMIs are higher, but you pay less interest overall. This means you save money on total repayment.
Longer Tenure = Lower EMIs but Higher Total Interest Paid
Choosing a longer repayment period makes your EMIs more affordable, but the interest accumulates over time, increasing the total repayment amount.
Example:
Suppose you borrow ₹2,00,000 at 12% interest:
2 years tenure = ₹9,414 EMI (Total Interest ~₹26,000)
5 years tenure = ₹4,449 EMI (Total Interest ~₹67,000)
How to Choose the Right Loan Tenure
Assess Your Monthly Budget: Pick a tenure where EMIs fit comfortably without straining your finances.
Consider Future Income Growth: If you expect your income to rise, you may manage a shorter tenure for bigger interest savings.
Compare Total Repayment: Always check the total repayment amount, not just the EMI.
Use EMI Calculators: Vizzve’s EMI calculator can help you quickly see how tenure affects cost.
Why Choose Vizzve
At Vizzve, we ensure transparency. Our platform clearly displays the EMIs, interest, and total repayment for different tenures before you confirm your loan. This empowers you to make the best choice for your financial situation.
Bottom Line
Loan tenure plays a critical role in your total repayment. A lower EMI might look attractive now, but could cost you thousands more over time. With Vizzve, you can compare and choose the tenure that saves you money while keeping repayments comfortable.
FAQs: Loan Tenure and Total Repayment
Q1. Does a longer loan tenure always mean more interest?
Yes. Even at the same interest rate, a longer tenure increases the total interest paid because the loan remains outstanding for more time.
Q2. Can I change my loan tenure after taking the loan?
Some lenders allow tenure changes through refinancing or restructuring. Vizzve’s partner lenders display these options upfront where available.
Q3. How can I calculate the impact of tenure on my EMIs?
Use an online EMI calculator like Vizzve’s to instantly see EMIs and total repayment across different tenures.
Q4. Should I always pick the shortest tenure possible?
Not necessarily. The shortest tenure saves interest but leads to higher EMIs. Choose one that balances affordability and cost.
Q5. Does prepayment reduce tenure or EMI?
Most lenders give you the option to reduce either your EMI or tenure after prepayment. Check your loan agreement or ask Vizzve’s support team for details.
Published on : 29th September
Published by : SMITA
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