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Loan Tenure: Choosing the Right Repayment Period
Financial Desk
Loan Tenure: Choosing the Right Repayment Period
Loan tenure means how long you take to repay your loan. Choosing the wrong tenure is one of the most common borrowing mistakes.
Short Tenure vs Long Tenure
Short Tenure
- Higher EMI
- Lower total interest
- Faster debt freedom
Long Tenure
- Lower EMI
- Higher total repayment
- Longer time in debt
Example
Loan: $4,000 at 12%
12 months:
EMI ≈ $355
Total repayment ≈ $4,260
36 months:
EMI ≈ $133
Total repayment ≈ $4,788
Lower EMI feels comfortable, but you pay $528 extra in interest.
How to Choose Wisely
- Ensure EMI fits your income
- Avoid choosing long tenure just for small EMI
- Balance comfort and total interest cost
Final Thoughts
Don’t chase the lowest EMI — chase the smartest repayment plan.