Personal Loan for 1 Year

A personal loan for 1 year is a short-term financial solution that helps you meet immediate expenses without a long-term commitment. Whether it is for medical emergencies, travel, or consolidating debts, such a loan may offer quick access to funds. 

With a shorter repayment period, it allows you to settle your loan swiftly. This makes it an ideal choice for those looking for convenience and minimal financial obligation over time.

A 1-year personal loan is perfect for emergency purchases and urgent needs. Here are some reasons to consider securing a 12-month loan:

• Quick Access to Funds

Short-term loans are disbursed faster than long-term credit options. This ensures timely access to funds for urgent expenses such as medical treatments, education fees, travel costs, or wedding-related payments.

• Faster Loan Closure

With a shorter repayment window, you can repay the loan quickly—typically within two years—helping you reduce your financial liabilities sooner.

• Improves Credit Score

Consistent and timely repayments on a short-term loan support the development of a healthy credit history and contribute to a higher credit score.

• Lower Interest Costs

The limited loan tenure leads to reduced total interest payments when compared to long-term loans, resulting in overall cost savings.

• Easy Online Application Process

Bajaj Markets offers a convenient digital application process with minimal documentation and prompt loan approval for added efficiency.

Here are some main benefits of a 1-year personal loan:

• Longer loan duration

• Lower monthly payments

• Higher debt amounts are easier to handle. 

• Ideal for self-employed or paid professionals

• Competitive interest rates

• No collateral asset or security is needed.

• Suitable for various financial requirements

• Quick procedure for approval and money transfer

The following are some drawbacks of a 1-year personal loan:

• Higher processing fees

• EMI payments over stretched tenures

• Unsecured loans have high interest rates

• Strict income, documentation and credit score requirements for some lenders

• Increased monthly payments 

• Delays or missed payments leading to penalties or negative impact on your credit score

Here is a table showcasing the interest rate, loan amount, and maximum tenure for one year offered by various lenders on Bajaj Markets:

Disclaimer: The details mentioned are subject to change at the lender’s discretion.

There are numerous criteria that represent your creditworthiness. These criteria influence the interest rate you pay when you apply for a personal loan.

• Credit Score

Your credit score is one of the key elements affecting your personal loan interest rate. A score above 700 indicates good creditworthiness and helps you secure loans at lower interest rates. A lower score often leads to higher rates due to the perceived risk involved.

• Income

Your income is another important aspect that lenders closely assess. You may qualify for more favourable interest rates when your income is consistent and shows growth. Lesser or inconsistent income is considered a lending risk and can result in higher rates.

• Loan Amount

The interest rate depends on the amount you intend to borrow. Lenders may offer lower interest rates for larger loan amounts when your salary allows you to repay the loan comfortably. Higher rates usually apply when the loan amount exceeds your repayment capacity.

• Relation with the Lender

An existing relationship with the lender can help you get better loan terms. For example, holding a salary account or using other financial products with the same lender shows trust. Lenders often offer lower interest rates to loyal and long-standing customers. 

• Employer’s Reputation

Your employer’s reputation also affects your loan interest rate. Working for a well-known company or a government organisation signals stability. Lenders view such borrowers as low-risk and may offer more competitive rates.

A shorter repayment tenure of 1-year results in higher EMIs, but the total interest paid is lower compared to loans with longer durations. You can use an EMI calculator to quickly find your monthly payments for a 1-year personal loan.

Simply enter the loan amount, interest rate, and tenure to get an instant view of your EMI and total repayment amount. The example below illustrates the EMI calculation for a 1-year personal loan at an interest rate of 9.99% p.a. for various loan amounts.

Disclaimer: Note that these are approximate values meant only for illustration. For actual EMI values, reach out to your lender.

Here are some tips you can follow to get a personal loan for 1-year at the lowest interest rates:

• Keep your credit score high

• Select a shorter loan term

• Examine interest rates offered by various lenders

• Choose a loan with low processing costs

• Maintain stable employment and a regular income stream

• Display a steady income and work history

• Engage in negotiations with the lender

• Consider adding a co-applicant