Personal loans are unsecured, meaning there's no collateral backing the loan. This increased risk for the lender is reflected in higher interest rates, typically 8-24% compared to 5-8% for secured home loans. Your credit score, income stability, and relationship with the lender all influence the rate you're offered.

The ideal tenure depends on your monthly budget and the total cost you're comfortable paying. A shorter tenure of 1-2 years results in higher EMIs but less total interest. A 3-5 year tenure makes payments more manageable but increases the overall cost. Aim for the shortest tenure where the EMI fits comfortably within 15-20% of your monthly income.

You can lower your EMI by negotiating a lower interest rate (easier with a strong credit score), choosing a longer repayment tenure, or borrowing a smaller amount. Some lenders offer rate discounts for existing customers or salary account holders. Comparing offers from multiple banks and online lenders often reveals more competitive rates.