Are you living in Singapore and worried about paying your college fees, filling a financial gap, or addressing a family emergency? Then, it’s time to find solutions. A loan in Singapore might be of help!
However, before you sign up for any loan, you need to dig into all the essentials and thoroughly understand all the concepts related to loans, such as the interest of the loan? Or what is the monthly amount payable?
One such critical component is the loan tenure. In simple terms, loan tenure is the entire length of any loan, but there are many other factors that you need to take into account to understand how loan tenure affects your loan.
The Significance of Loan Tenures
Let us explore the advantages of understanding loan tenures better.
It aids you to manage and plan your monthly payments better
When you decide on taking a loan in Singapore, the first thought is to clear the loan as soon as possible.
We get that you do not want to carry the burden for long enough, but it is important to consider that the shorter the period, the higher the monthly payment. This can broadly impact your financial management negatively and can cause you cash flow issues.
Hence, it would be best to plan smartly about how to direct only a small chunk of your salary into repayment to avoid any financial disturbances.
If you must pay the loan in a shorter period, then you should consider cutting on some expenses that do not require urgency or aren’t majorly important. For example, a movie on Netflix will work instead of going to theaters twice every weekend!
It helps you in the calculation of the amount payable.
If we suppose that the loan tenure is long, it is implied that you will have to pay more than that in shorter loan tenure. However, this also means that you will have less financial burden because the monthly payments will be a lot less.
In both cases, shorter or longer periods, the number of months involved will help you calculate the total amount payable.
You can even use a loan calculator to check the effect of terms on the total amount.
You can use it to find out the cost of your loan
The price you pay on top of the loan is known as the cost of the loan. As an example, let’s see how a personal loan of $100000 will cost you for 2, 3, and 5 years on a monthly basis.
If the interest rate is 6.75%, the monthly payments in a two-year tenure will be $4,465.93 whereas, in a three-year tenure, it will be $3,076.29, and in a five-year tenure, it will be $1,968.35. Note how the loan tenure impacts the monthly payment.
Loan Tenures: Some Facts
By now, we know that all loans have a specific time required for repayment, which is known to be loan tenure. However, you will be amazed to know that payments are changeable for credit card loans depending on your outstanding balance.
Some more facts about loan tenures are:
- The amount of funds involved mainly determines the loan tenure.
- The longest tenures are of home loans which can even span several decades, depending on the amount.
- Personal loans, business loans, and car financing have comparatively shorter tenures of up to five years.
- Lenders are often open to renegotiate if you are having a hard time repaying it.
Find The Perfect Solution For Yourself
Now that we are aware of all the impacts of loan tenures, it would be wise to consider it through a lender comparison site.
Lendela is your solution! Lendela will assist you in finding the loan with the best conditions that suit you. They make this process so easy and simple.
All you need to do is visit their website, fill in a short application, and provide them with the relevant documents.
They will then send your application to different lenders, and you will be notified about the offers. You can then go with the best option.
Don’t just rush the process. Instead, work with Lendela and identify your best pick.