Business Wire India
Bajaj Finance Limited, the lending arm of Bajaj Finserv, offers personal loans that can be used to fund big-ticket expenses and other obligations in a cost-effective manner. This unsecured loan not only offers ease of accessibility, but also an ample loan amount, which is more than capable of servicing most needs. Further, due to its collateral-free nature, this loan has a speedy approval and disbursal rate, making it a viable option even for those customers who are looking to address emergencies.

However, regardless of the need, borrowers should consider their repayment tenor carefully, as it directly affects the interest outgo. Naturally, the higher the interest, the costlier the loan, and so, it is important to know exactly how to find the right balance.

Decide the repayment tenor before borrowing
Deciding on the personal loan tenor during the planning stage is as important as finalising the required amount. Borrowers should carefully gauge their financial capabilities and then decide on a manageable instalment. Typically, it is best that customers ensure that their loan payments do not exceed 35% of their earnings, as this leaves ample room for other monthly spends and a small contribution towards an emergency fund.

To decide on a figure methodically, borrowers may use the personal loan EMI calculator. This free online tool computes a borrower’s EMIs as per the loan amount and tenor selected. Using the slider, customers can change the inputs to find an EMI that suits their repayment capacity. Short and long tenors both have their own pros and cons, so it’s important for customers to consider this information before locking in on a tenor.

Shorter tenor = lower interest outgo, but higher EMIs
While many borrowers may be inclined to opt for a shorter loan tenor to save on total interest payments, it may not be the most favorable decision for them. This is because short loan tenors translate into higher monthly instalments. This may make it difficult to manage payments consistently, especially if the instalment constitutes a large percentage of the customer’s monthly income, or if he/she is already servicing existing debts.

Longer tenor = higher interest outgo, but lower EMI
In contrast to a short tenor, a long tenor increases the total interest payable, but allows for smaller monthly instalments. While this helps borrowers make payments comfortably and safely, it increases the total cost of borrowing. That said, a long tenor also helps borrowers build their credit score. These are factors that should be weighed by customers during the planning stage to make a smart borrowing decision.

When planning to apply for a Bajaj Finserv Personal Loan, borrowers should aim to strike a balance between the tenor and monthly instalments after considering parameters such as existing financial obligations and financial prospects in the near future. This will ensure that the risk of defaulting on payments is negated and at the same time the EMIs are as low as can be. Once customers decide on a loan repayment tenor that’s best suited to their financial capabilities, they can apply online or check their pre-approved loan offer to expedite loan approval.
About Bajaj Finance Limited

Bajaj Finance Limited, the lending company of Bajaj Finserv group, is one of the most diversified NBFCs in the Indian market catering to more than 36 million customers across the country. Headquartered in Pune, the company’s product offering includes Consumer Durable Loans, Lifestyle Finance, Digital Product Finance, Personal Loans, Loan against Property, Small Business Loans, Home loans, Credit Cards, Two-wheeler and Three-wheeler Loans, Commercial lending/SME Loans, Loan against Securities and Rural Finance which includes Gold Loans and Vehicle Refinancing Loans along with Fixed Deposits. Bajaj Finance Limited prides itself on holding the highest credit rating of FAAA/Stable for any NBFC in the country today. It is also the only NBFC in India with the international ‘BBB’ with a stable outlook for long-term, by S&P Global Rating.

To know more, please visit: https://www.bajajfinserv.in