The extension of your personal loan tenure relies on your lender’s policies and your repayment track record. Certain lenders might offer the option to prolong the tenure of your loan. This can prove beneficial if you encounter temporary financial challenges and require a reduction in your monthly equated monthly installments (EMIs). Extending the tenure spreads out the loan repayment across a longer duration, consequently reducing the EMI amount.
What decides the extension of loan tenure?
The factors affecting decisions regarding the extension of loan tenure include:
- Lender’s policy: Loan tenure extension availability varies among lenders, based on their product offerings and policies.
- Repayment history: A track record of timely payments on your current loan enhances the likelihood of approval for a tenure extension, while a history of missed payments diminishes it.
- Reason for extension: Lenders assess the reason for your request, with valid reasons such as temporary financial hardship potentially receiving more favourable consideration.
How to seek an extension of loan tenure?
If you’re finding it challenging to manage your current personal loan EMI and contemplating a loan tenure extension, here’s a guide on navigating the process:
- Reach out to your lender: Begin by contacting your loan provider to inquire about their policy regarding extending the loan tenure. Carefully examine your initial loan agreement. This contract details the terms and conditions of your loan, including provisions concerning loan tenure extension. After familiarising yourself with the agreement, reach out to the customer service team at your lender’s office for the most precise and current details regarding the company’s policies and procedures for extending loan tenures.
- Gather documentation: Should your lender permit an extension, ensure you have documentation ready to support your request, such as evidence of income hardship. Furthermore, inquire about the lender’s specific prerequisites for extending the loan tenure. These requirements may encompass factors such as the minimum and maximum extension periods available, eligibility criteria based on your repayment history (with a positive history improving your chances), and any processing fees linked with the extension.
- Consider other options: Before proceeding with a loan tenure extension, explore alternatives such as debt consolidation or negotiating a reduced interest rate. For instance, contemplating consolidating your loan alongside other high-interest debts into a single loan with a potentially reduced interest rate and an extended term can result in a lower EMI. Additionally, you might negotiate with your current lender for a reduced interest rate on your existing loan, which could effectively decrease your EMI without necessitating an extension of the loan tenure.
Keep in mind that extending the loan tenure could result in paying more interest over time. Therefore, it’s crucial to carefully evaluate the advantages and disadvantages before reaching a decision.
Frequently Asked Questions (FAQs)
Q. Is loan foreclosure an option?
Foreclosure is feasible only after settling all outstanding payments and charges in full. It is permitted only once this condition has been met.
Q. What role does the CIBIL score play in loan approval?
The CIBIL score serves as a reflection of your financial standing and loan repayment history. Maintaining a robust CIBIL score is pivotal as it positively influences your loan application, the approved loan amount, and the tenure.
Q. What are the benefits of applying for an online personal loan?
Through this online service, you can access real-time tracking of all transactions and the status of your loan. Many banks and NBFCs provide this service to expedite information retrieval for customers and minimise email and call volumes.
Q. Is it possible to apply for a joint personal loan?
Opting for a joint application with a co-applicant for a personal loan is often advisable. This can boost your income eligibility and potentially allow you to qualify for a larger loan amount.
Q. What is the typical waiting period for the approval of your loan application?
Generally, the loan processing is completed within seven days of receiving all necessary documents from the applicant.
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Published: 14 Mar 2024, 03:06 PM IST