What is the Minimum and Maximum Tenure for Personal Loans

Personal loans have emerged as a lifeline for people who look for instant financial solutions for emergencies, weddings, education, or even paying off existing debts. Choosing the right personal loan tenure is as important as opting for the loan amount. With personal tenures in India varying from 12 months to 7 years, the choice has a direct bearing on your monthly budget and overall interest outgo.

In this blog, we will discuss all about personal loan minimum tenure and personal loan maximum tenure, compare personal loan offers from leading banks and NBFCs (such as HDFC, SBI, and Axis Bank), and give practical tips so that you can make an informed choice.

What is Personal Loan Tenure?

Personal loan tenure is the time frame within which you commit to repay your principal loan amount and interest in fixed EMIs. Personal loan tenure usually ranges between 12 months to 7 years in India, as per the lender’s policy. It balances two key factors:

• Short Tenures (12 months–3 years): These are ideal if you want to clear your debt quickly. However, they come with higher EMIs, which may strain your monthly budget.
• Long Tenures (5–7 years): These reduce your monthly EMI burden but increase the total interest paid over time, thereby resulting in higher total costs.

For instance, if you take a loan of ₹5 lakh at 12% interest per annum:

• A tenure of 3 years will make your EMI of ₹16,607 with a total interest of ₹97,852.
• A tenure of 7 years will lower your EMI to ₹8,977 but will raise your total interest to ₹2,53,848.

This highlights the importance of selecting the right tenure – it's a trade-off between affordability and cost-effectiveness.

Minimum and Maximum Tenure for Personal Loans in India

In India, the majority of lenders provide personal loan tenures ranging between 12 months (1 year) and 84 months (7 years). Here’s a general overview:

• Minimum Tenure for Personal Loans: Typically begins at 12 months.
• Maximum Tenure for Personal Loans: Usually limited to 7 years (84 months) by most banks and NBFCs.

Bank-wise Personal Loan Tenure Comparison (2025)

To provide you with a better idea of what various lenders have to offer, here's a comparison of personal loan tenures of prominent banks and NBFCs in India:

Note: Interest rates differ based on credit history, income stability, and other factors.

How to Choose the Right Loan Tenure for Your Needs

Wondering how long you should take to repay your loan? Let's explore how your income, financial goals, and current obligations should shape this important decision:

• Monthly Income: If less than 30% of your monthly income goes towards EMIs, choose shorter tenures so that you can minimise interest payments. For instance, if your monthly income is ₹50,000, make sure your EMI does not exceed ₹15,000.
• Financial Goals: Match your loan tenure with your financial aims and needs. For instance:
  • • A short tenure (1–2 years) is best for funding weddings or holidays where you might want to repay quickly.
    • Longer tenures (5–7 years) suit better for more expensive obligations, such as home renovations or consolidating high-interest debts.
• Existing Debt: In case you have other loans or multiple credit cards with outstanding dues, choose longer terms to decrease the EMI burden.
• Flexibility: Look for platforms that offer EMI adjustments throughout the tenure of the loan. This provides borrowers with greater control over their repayment schedules.

Does your Personal Loan Tenure Affect EMI and Total Interest?

Yes! Your personal loan tenure directly influences both your monthly EMIs and total interest costs. The relationship between tenure, EMIs, and total interest is eye-opening. Did you know that adding just a few years to your loan term could cost you thousands in extra interest?

Let's understand with an example how small changes in your repayment timeline can dramatically impact your financial future:

Imagine you borrow a ₹5 lakh personal loan at an interest rate of 12% per annum.

Extending tenure from 3 to 7 years reduces EMI by 46% but increases interest by 159%.

As seen above:

• Shorter tenures result in higher EMIs but lower overall interest costs.
• Longer tenures reduce EMIs but significantly increase total interest paid.

While longer tenures offer more affordable monthly payments, they result in substantially higher interest payments over the life of the loan. Use My Mudra’s free EMI calculator to simulate different tenure scenarios before applying.

Key Factors That Influence Loan Tenure Approval

Think getting your desired loan tenure is just about asking? Not quite! Lenders consider several crucial factors before approving your preferred repayment timeline. Understanding these approval criteria can significantly improve your chances of securing terms that work for you.

• Credit Score: A high credit score (>750) improves your chances of securing longer tenures with competitive rates. My Mudra offers free credit health monitoring to help you improve your score before applying.
• Income Stability: Salaried individuals with steady incomes will tend to qualify for longer tenures compared to self-employed applicants and entrepreneurs with inconsistent incomes.
• Loan Amount: Bigger loans usually have longer repayment periods to ensure EMIs are feasible and manageable.
• Lender Policies: While banks like Indian Overseas Bank offer up to 84-month tenures, NBFCs like Shriram Finance cap their maximum tenure at 60 months.

Wrapping Up

Securing personal loans with the right tenure can help you save big. Make sure you use the My Mudra EMI calculator to get a complete idea of how tenure will affect your EMIs and total interest payout. A well thought decision is always better than a rushed one!

Take control of your finances by exploring My Mudra’s personalized tenure solutions today – where smart borrowing meets financial freedom!

Also Read: Personal Loan Interest Rates 2025: Starting @ 9.99%