Before you choose the personal loan apply online option, here are some considerations worth noting while selecting an extended-term personal loan.

• A longer tenure for your personal loan may help you comfortably repay the same. It is because your monthly EMI will be lower and more manageable.

• You will, however, have to pay more interest over the loan period.

• Your total loan cost will thus increase

• Most personal loans will not ask for collateral, although some lenders may have more stringent criteria for long-term loans.

• Your monthly income and credit score will be crucial for getting the loan. At the same time, some lenders may ask for a guarantor or collateral in some form to provide a long-term loan.

• You can apply for higher loan amounts with a longer tenure. It will help you make big-ticket purchases.

• You can boost your credit score by paying EMIs on time throughout a longer tenure.

• Smaller EMIs help you reduce your debt-to-income (DTI) ratio. It is the proportion of your debt to your monthly income. Longer personal loan tenures help you automatically bring down your EMIs every month.

Consider two scenarios in this case. Suppose you take a personal loan of Rs. 5 lakh for five years at an interest rate of 12%. With the longer tenure, your monthly EMI comes down to Rs. 11,122. However, you end up paying Rs. 6,67,320 as the total loan cost over five years. Hence, if you keep the principal amount aside, your interest payment is Rs. 1,67,320 or near this figure.

Now consider a scenario where you have a tenure of 3 years. Your monthly EMI will be significantly higher at Rs. 16,607 per month. However, your total loan cost will be Rs. 5,97,852. Hence, keeping the principal amount aside, your interest cost reduces to Rs. 97,852 or whereabouts.

So, choose wisely, depending on your financial goals, repayment ability, and other factors.

Personal loans can be taken for a variety of purposes as per the requirements of the borrower.