Interest Rates vs Tenures – Which to Focus on in Your Personal Loan EMI? 


When taking a personal loan on an equated monthly instalment (EMI), deciding whether to focus on interest rates or tenures can be a challenging task. How does EMI work? Let’s say you’ve applied for a personal loan of a certain amount, there will be two factors deciding how you will pay the loan back. First is the interest rate, which is the rate of interest at which the amount they borrowed. The second is tenure, meaning the time in which the loan must be repaid. You can calculate the EMI for your personal loan amount through these two factors. 

Interest rates and tenures share an inverse relationship, so it is important to understand your short and long-term financial stability before deciding on an EMI plan. Start by deciding your required loan amount and gathering the documents required for a personal loan. Then, discover the interest rates and tenure packages offered by lenders, and choose the one suitable to you. 

The Relationship Between Interest Rates and Tenures 

As mentioned, interest rates and tenures share an inverse relationship. A lower EMI will have a longer tenure to lessen the burden of the monthly expense, however, in this scenario, the total amount you pay in interest rate will be higher. 

On the other hand, a higher EMI denotes shorter tenures with a lower total amount paid in interest. Depending on the loan amount and the length of the tenure period, a higher EMI can save you a substantial amount in the long run. Consider what is best for your current financial planning before coming to a decision. 

Interest Rates or Tenures – How to Decide? 

The first step is to understand monthly expenses versus monthly income. By doing so, you can assess how much of your budget you can allocate toward paying your personal loan EMI. Following this, ensure that you possess all the documents required for a personal loan and calculate how much of a loan you require for the goal you have set your eyes on. 

The loan amount you require will be directly proportional to the amount of EMI you pay and the tenure length. Approach lenders and understand what kind of interest rates and tenure periods are on offer for the amount you wish to borrow. If a lower EMI fits your budget, then you will need a longer tenure period to ensure financial stress does not accumulate in the short run. However, if you can sustain a higher EMI, then opting for a shorter tenure period is advisable. 

In some scenarios, you may wish to pay the loan faster than the EMI and tenure period agreed to. Doing so can result in a pre-payment penalty that may or not be worth incurring. Check with your potential lender on the terms and conditions regarding the pre-payment of a loan before deciding.

Remember to calculate the EMI for your personal loan per interest rate and tenure period option given. Calculate the total interest you will have to pay and try to mitigate the amount versus the amount you can afford to spend on your EMI. You can save time and effort by calculating the EMI for your personal loan online. If you are uncertain about the right personal loan EMI, seeking professional advice is one way to map the road ahead. 


Your personal loan EMI amount depends on the amount you wish to borrow, the interest rate, and the tenure period. The higher the loan amount, the higher the EMI will be. Interest rate and tenure share an inverse relationship. A lower EMI amount entails longer tenure periods and higher interest rates. A higher EMI amount entails lower tenure periods and higher interest rates, and the amount that can be saved in interest paid is substantial. 

Choose the right personal loan EMI by evaluating the funds you can allocate towards its payment. Understand the various interest rates and tenure periods that are being offered by lenders for the amount you wish to borrow. You can calculate the EMI for your personal online for efficiency and accuracy. If you’re EMI budget is on the lower side, a longer tenure period will be necessary to avoid financial strain in the future. 

At Fullerton India, You Can:

  • Calculate the EMI for your personal loan  
  • Seek professional advice. 
  • Apply for an instant loan in a few clicks. 
  • Access a diverse variety of personal loans.
  • Achieve your short and long-term financial goals.

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