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How to Choose a Personal Loan Tenure According to Your Repayment Capacity

Clix August 6, 2021


An urgent personal loan is a quick and easy source of finances that you can use to cover different expenses, from a medical emergency and debt consolidation to a wedding, education, vacation, and home renovation. However, your repayment capacity is crucial to have a hassle-free and smooth borrowing experience, whichever type of loan you take. NBFCs like Clix Capital allow borrowers to select their loan tenure according to their monthly budget and repayment capacity.

Here’s why it is crucial to choose your personal loan tenure according to your repayment capacity.

What is a Personal Loan?

Personal loans are unsecured finances that you can borrow from lenders to cover costs of any planned or unplanned expenses, including wedding, home renovation, education, vacation, debt consolidation, or medical emergency. You can take a loan to cover your cost now and pay the borrowed amount later in easy EMIs over your selected loan term. Most NBFCs offer flexible repayment terms that the borrowers can choose according to their repayment capacity.

Understanding Your Repayment Capacity

While applying for an urgent personal loan, you must first understand what repayment capacity is and how you can calculate yours. Simply put, repayment capacity is the borrower’s ability to repay the loan amount on time. Before approving your loan application, lenders want to ensure that their borrowers can repay their loan EMIs without any default or delays.

When it comes to calculating your repayment capacity, you need to analyse multiple factors, including your monthly income, financial obligations, disposable income, existing liabilities, income source, job stability, and others. Typically, lenders expect your debt-to-income ratio to be less than 30-40% of your monthly income. The higher disposable income you have, the higher your chances are of getting urgent personal loan approval.

Selection of Your Loan Tenure

When applying for a personal loan, you have to repay it in EMIs spread across a loan term. This is where a wise selection of your loan tenure comes into play. The loan amount you may borrow largely depends on the loan term you select. The higher the loan amount you borrow, the higher will be your EMIs, and vice versa.

The EMI amount you pay every month also depends largely on the loan tenure you choose. The longer term you choose, the smaller will be the EMIs, but you will end up paying a higher interest amount by the loan term-end. On the contrary, if you choose a shorter loan term, your EMI amount will be bigger, but you will pay off your loan sooner and save big on the interest outgo.

Role of Personal Loan EMI Calculator to Select Your Loan Tenure

A personal loan EMI calculator is a valuable tool that many lenders provide on their website. It is a free-to-use tool that you can use any number of times to get an approximate amount of your monthly EMIs. The longer tenure you choose, the bigger will be the EMI amount, and vice versa. Accordingly, you can increase or decrease the loan amount or adjust the loan tenure to find an EMI amount that you can easily incorporate into your monthly budget. Therefore, a personal loan EMI calculator is an excellent tool that you can use to choose a loan tenure according to your repayment capacity.

Compare Lenders to Find the Best Loan Offer

When you need funds to cover your costs, one of the most crucial steps is comparing lenders and finding the best loan offer with EMIs you can easily afford. You must consider various factors while comparing loan offers from different lenders, including loan amount, interest rates, repayment tenure, and other fees and charges. Find the loan offer with the most competitive interest rate so that you can choose the shortest possible loan term according to your repayment capacity.

How to Get a Loan Online?

Are you planning to apply for a personal loan from Clix Capital? These are the steps to follow:

Clix Capital offers personal loans of up to ₹25 lakhs for a loan tenure of 12 to 48 months. You may use our personal loan EMI calculator to choose your loan term according to your repayment capacity and apply. Once you apply, you may get your loan approval in as little as 15 minutes* and instantly receive funds to meet your financial needs.

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You can also reach out to us at or call us at 1800 200 9898

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