Know the Pros & Cons of Long Term Personal Loans Before Applying

Life happens with medical emergencies, personal problems and financial crises. There is no end to problems, as real life is very different from the fairy tale you thought it to be. However, we do have a magic wand that can help us through thick and thin. It is a personal loan from Clix Capital that can help us recover from any crisis or emergency. An instant fund that has no end usage restrictions gives us the best financial goals and stability during an emergency. Think about a situation like a medical emergency where you are cashless. An instant personal loan offers you instant cash to carry on with the treatment. However, a personal loan is both a long-term and a short-term loan. You need to decide on the right tenure based on your ability to pay the EMI. There are some perks and drawbacks to a long-term instant personal loan that you must know before applying for one.

Perks of a long-term loan

  • Flexibility: A long-term personal loan is a flexible form of loan that can be used for anything and everything. It has no rigidity in the end usage and is meant for multipurpose. It is similar to having your own cash that can be used for anything that you want. A long-term personal loan is definitely a one-stop solution to manage a crisis situation.
  • Long tenure: A long-term loan goes on for a long time. It usually exceeds a period of 2 years or more.
  • Low EMI: A long-term loan ensures that a loan has a small EMI amount payable every month. This is the main reason why a long-term personal loan is chosen over a short-term loan. When you choose a longer tenure loan, the EMI will also be low. Since the principal loan amount will be divided by a long tenure in terms of months, you will get a low EMI. Low EMI means low burden. It is good for borrowers with a low income.
  • Low interest rates: When you choose a long-term loan, the rate of interest is also low. There is a long time for the loan provider to recover a good amount of profit, so the rate of interest is kept low. This gives you an affordable loan and you don’t pay a huge amount every month to repay your loan.

Drawbacks to long-term loans

  • Long-term burden: A debt is a burden. When you choose a long-term loan, the burden will also be long-term. The burden of EMI every month can be daunting as it takes a good share of your income. You need to compromise on various expenses and wishes just to pay your EMI for years.
  • High total interest: The interest rate is low, but when you pay it for a long time, you end up paying a lot of money. In this case, a short-term loan is good because you pay some amount and you close. For a long time, the interest rate becomes really expensive.
  • Unprecedented situation: When you carry forward a personal loan for a longer time, there can be various undesirable situations and you may face a bad debt.

Read More: 5 Ways to Manage your Personal Loan EMI Payments

Finishing up

It is good to keep the loan term short so that you can quickly pay it off. Even if you choose a long-term, you should try to pay more than the minimum and close it soon. At the time of applying for an instant personal loan, you must have all your personal loan documents.

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