For What Period It Is Better To Take A Personal Loan

If you want to take a personal loan from a bank, do this with the cold head. Study what interest goes under a certain term. In the course of this process just make simple calculations:  how much money will you get on credit and how much will you pay back including the interest?

Relay Only on Yourself

A person comes to the bank, makes an application for a credit and the bank replies that the salary is not enough to take money for one year. They suggest you can take this loan for 3 years, with less monthly payments. Cool, you think!  But there is a small nuance: in case you decide to take a three times longer period, overpay on a loan will cost you more.

It’s not profitable to take a loan for a longer period without early repayment. Interest on 3 years will increase more than on 1 year. With the same rates, this rule always applies.

But there is one exception. This does not apply if you repay the loan ahead of schedule in full. Being “an early bird”, you close the credit agreement and stop paying interest.

Loan Paradise

The US is paradise for the life on money which you haven’t earned yet. But there are some things which do matter when you decide what term is the best to take a personal credit.

Study the factors which influence your eligibility when you want to pay in shorter or longer term:

  • Estimate how your credit scores influence annual percentage rate from bank.
  • Compare you income and employment guarantee with the term interest rates.
  • Learn how to communicate with the bank if you fail to pay on term.

So before taking a loan from bank, think well about your financial potential and safety, do not be seduced by your desires. Make sure you will be able to pay the credit back during the period chosen by you, or indicated by the bank. Also, make sure you secure yourself and have some additional sum that you will not spend unless there is no other option. So, to cut the long story short, taking personal credits for longer seems more comfortable and safer, but you will definitely overpay. Taking loans for shorter period means spending less money, but the risks of not dealing with the loan are higher.


Just in case be aware of such option as refinancing. It is a situation when another bank gives you a new loan at a lower rate so that you can repay the old loan. on the part of another bank, this is an opportunity to make money, and you will be able to pay the first credit on time.

Refinancing is good when you have no income problems and you are just looking for an opportunity to make your financial life easier.

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