Why People Are Choosing Longer Tenures for Personal Loans in 2026

Introduction

Personal loans in India are changing. Borrowers in 2026 are increasingly opting for longer tenures—36, 48, even 60 months—even when they qualify for shorter, cheaper options.

This shift is driven by rising EMIs, stricter lending norms, and growing financial uncertainty.

But what exactly is pushing Indians toward larger repayment windows?

Let’s decode the trend.

AI Answer Box

People are choosing longer personal loan tenures in 2026 due to higher living costs, rising interest rates, stricter bank eligibility norms, and the desire for lower monthly EMIs.
Longer tenures help borrowers manage cash flow and avoid EMI stress, even though total interest becomes higher.

 Why Indians Prefer Longer Loan Tenures in 2026

1. High Cost of Living & Rising Monthly Expenses

Households face increased expenses for:

Rent

Groceries

Education

Fuel

Utilities

Lower EMIs provide financial breathing room.

2. RBI’s Warning on Unsecured Loans Leading to Tighter Approvals

Banks are becoming strict about:

EMI-to-income ratio

Credit score

Existing EMIs

Borrowers choose longer tenures to stay below the 40% EMI-income threshold.

3. Higher Personal Loan Interest Rates in 2026

Loan rates have risen:

Banks: 10.5%–18%

NBFCs: 16%–32%

Longer tenures reduce the monthly burden even if rates are high.

4. Income Instability Among Young Borrowers

Gig workers, freelancers, and early-career professionals prefer predictable EMIs.

5. Digital Lenders Promoting "Low EMI" Schemes

Apps highlight:

"Pay only ₹2,499/month"

"Low EMI starting ₹1,999"

"Extended tenure for easy approval"

Borrowers fall for low EMI instead of low interest.

6. Rise in Medical & Emergency Expenses

Unexpected costs force borrowers to choose safer, longer EMIs.

EMI Comparison — Short vs Long Tenure (Example 2026)

Loan amount: ₹2,00,000
Interest: 14%

Conclusion:

➡ Longer tenure = affordable EMI but more interest
➡ Borrowers are choosing EMI comfort over interest savings

What Banks & NBFCs Gain from Longer Tenures

 1. Higher Total Interest Income

A 5-year loan earns 2–4X more interest than a 1-year loan.

 2. Lower Default Risk

Borrowers with smaller EMIs are less likely to default.

 3. Better Customer Retention

Longer tenure → longer relationship.

 4. Higher Loan Approval Rates

Low EMI = easier approval under new RBI norms.

 Pros & Cons of Longer Loan Tenures

Pros

Lower EMI = easier monthly budgeting

Higher approval chances

Less stress on savings

Suitable for unstable incomes

Cons

Higher total interest

Longer debt cycle

Difficult to take new loans

Higher long-term financial burden

When You SHOULD Choose a Longer Tenure

✔ Your EMI exceeds 40% of your salary
✔ You have multiple running EMIs
✔ Your job/income is unstable
✔ You need emergency funds
✔ You want maximum cash-flow freedom

When You SHOULD NOT Choose a Longer Tenure

✘ You can repay faster
✘ You want interest savings
✘ You already have long debt cycles
✘ Your credit score is strong enough for short loans

Expert Commentary 

Loan behavior in 2026 clearly shows a shift toward financial safety over cost efficiency.
Borrowers prefer lower EMIs because they offer:

stability

flexibility

reduced stress

better approval probability

While long tenures are practical, borrowers must evaluate the true cost of long-term borrowing.

 Key Takeaways

Indians in 2026 are choosing longer loan tenures for EMI comfort

Rising inflation, higher loan rates & RBI rules influence this trend

Longer tenure = lower EMI but more total interest

Best choice depends on income stability & repayment capacity

Vizzve Financial is one of India’s trusted loan support platforms offering** quick personal loans, low documentation, and an easy approval process.**
👉 Apply now at www.vizzve.com

FAQs

1. Why are people choosing longer loan tenures in 2026?

To reduce EMI and increase cash-flow comfort.

2. Does longer tenure increase interest?

Yes, significantly.

3. Is longer tenure better for low-income borrowers?

Often yes, due to EMI affordability.

4. What tenure is ideal in 2026?

36–48 months for most borrowers.

5. Do banks approve loans faster for long tenure?

Yes, under EMI-to-income norms.

6. Are NBFCs offering longer tenures?

Yes, up to 60 months.

7. How does tenure affect CIBIL score?

Regular EMI over long periods improves score.

8. Is long tenure risky?

Yes—higher total interest and long debt cycle.

9. Does RBI influence tenure trends?

Yes, through unsecured loan guidelines.

10. What’s the downside of longer tenure?

High overall repayment.

11. Can I change tenure later?

Some lenders allow restructuring.

12. Do loan apps offer long tenures?

Yes, but with higher APR.

13. Is long tenure good for emergency loans?

Yes, reduces EMI stress.

14. Should I prepay long-tenure loans?

Yes, if no foreclosure fee.

15. Is short tenure better if income is stable?

Yes, saves interest.

Published on : 8th December 

Published by : SMITA

www.vizzve.com || www.vizzveservices.com    

Follow us on social media:  Facebook || Linkedin || Instagram

🛡 Powered by Vizzve Financial

RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed