Using personal loan for debt consolidation? The pros and cons of this move

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Opting for a shorter loan tenure: Accelerating the loan repayment results in a lower overall interest payment. This is attributed to the interest being calculated based on the remaining loan balance, which diminishes more rapidly with shorter tenures. Nevertheless, opting for a shorter loan tenure necessitates larger monthly payments for timely repayment.

This may impose strain on your monthly budget, particularly if the loan amount is substantial. - Opting for a long loan tenure: With an extended loan term, the accumulated interest over time increases. This is because you’re paying interest on the outstanding balance for an extended duration.

Stretching the repayment across a more extended period results in smaller monthly payments, potentially making them more manageable within your budget. When choosing the tenure for a personal loan, it’s essential to assess various factors that align with your financial situation and objectives. Here are crucial factors to contemplate when deciding on the tenure for a personal loan: - Your financial plan: Are you able to handle the increased monthly payments that come with a shorter loan duration? Take into account your necessary expenditures, current debts, and other financial obligations.