Do long-term personal loans actually exist?
Yes, they exist because large expenses may catch you. As the name suggests, long-term personal loans are a set amount of money paid down over a period of 10, 20, or more years.
The minimum repayment length of these loans is five years.
Long-term personal loans have been designed to fund big planned expenses. Because of large funding, these loans are subject to collateral.
Unlike small loans, there are a lot of factors to take into account to apply for these loans. We know that it can bring confusion in your mind and complicated for you, but not to worry. We have a network of trusted online lenders to whom we can introduce you.
To get a better understanding of long term personal loans and how they differ from standard personal loans, look at the given table:
|Small personal loans||Long term personal loans|
|Loan tenure||Less than five years||From five to 10, 20, 30, or more.|
|Collateral||No security is needed||Security is required|
|Reasons to borrow||Small planned expenses and emergencies||Big planned expenses only|
Long-term personal loans will be your best bet when facing large expenses, which generally include planned ones. Here are the purposes you can use these loans for:
You want to install a rooftop solar panel
Are you looking to save energy bills? You will probably be pondering over the installation of rooftop solar panels.
Whether your savings have deceived you or you could not put by, long-term personal loans can make your dream fulfilled.
These loans also cover other refurbishment projects, including kitchen, bathroom, or the entire interior remodeling.
You want to buy a house
Mortgages are considered the most favorable option when buying a house, but with increasing interest rates, they are becoming expensive.
If the market value of your house falls within the lending range, long-term personal loans will be an ideal choice. You will avail of lower interest rates than mortgages.
You want to buy a shop or store
Whether you want to rent it out or use it for your own business purposes, these loans will provide you with quick funding without wanting you to put deposit size, about 40% of the market value, unlike buy-to-let and commercial mortgages.
A wedding is a lifetime event, so you will not like anything to go missing on your big day. Long-term personal loans can make your dream a reality without putting a burden of repayments on your budget.
Consolidating your debt
Bad circumstances can trap you into debt. When you struggle to manage payments of multiple debts, you can take out a long-term personal loan to pay off all of your outstanding dues, so you are left to pay down monthly installments toward this big loan.
You can treat these loans as debt consolidation loans, but you will get money at lower interest rates, so they are more affordable than them.
Yes, long-term personal loans are suitable for funding business expenses – but only one-off costs, expenses that do not recur every now and then. Given below are the prime examples of such costs:
Long-term personal loans for businesses are also ideal for start-ups. These loans will be your best bet if:
FastenLoans will arrange lenders based on your requirements to offer you a deal that suit your needs and affordability. We will also help you arrange all documents that a lender needs to assess your credibility. You do not need to get a headache with tortuous paperwork as this is our job.
Long-term personal loans are undoubtedly more affordable than short-term personal loans, but you need to look over other factors to draw a conclusion about these loans.
Below is the table that explains both relevance and risk included with such loans:
|You can borrow a large amount of money to fund your big expenses.||You will pay more interest in total compared to short-term loans.|
|You will pay down the debt in small monthly payments over the tenure.||You will be in debt for a longer time.|
|Timely payments will take your credit score up.||You may lose your security in case of default, and your credit score will go down.|
|More affordable alternative to mortgages||Without the help of a broker, you may end up with an expensive deal.|
Long-term personal loans are assumed cheaper than short-term loans because you pay down lower monthly payments. The size of monthly installments cannot determine whether the loan is affordable. You should consider the total interest to be paid on loan.
Understand it by an example.
|Short term persona loan||Long term personal loan|
|Loan term||4 years||7 years|
You can see monthly payments are higher with short-term loans, though the total interest paid is almost half of what you pay with long-term loans. It happens because of shorter tenure. Since the principal amount is spread over seven years in the case of long-term loans, 3 years more than short-term loans, interest accrue for that period, making almost double the total interest.
If you have a choice to choose between a small and long repayment period, you cannot just make the decision based on the total interest. If you cannot make monthly payments on time, you will add up the total cost of the loan, and eventually, you will find your small personal loan costs you much more than the long-term personal loan.
Long-term personal loans are not approved to those who have bad credit ratings, but we have a panel of a few lenders who also open the doors for bad credit applications. There can be a lot of reasons for having a poor credit rating, such as a short spell of unemployment or hospital admission due to illness. Such unavoidable circumstances should not come in the way of getting the long term personal loan with bad credit approved.
As a broker, we will evaluate your needs so we can arrange a suitable lender, and hence there is no risk of rejection due to mismatching. The lender we introduce to you will run a credit check and look at your current financial situation to determine if you can afford to pay back the debt.
Our partner network will find a loan that suits your needs best and offers you a fair interest rate despite a bad credit rating.
No credit check loans are those approved without running a credit check. Since long-term loans involve a lot of money, no lender can approve such a big amount of money without running a credit check. The fact is that long-term loans with no credit check do not exist at all.
No credit check facility is available, with only payday loans repaid within 14 days or a month. We have reputed online lenders in our network who assure you that you do not get more money than your affordability. The lender will certainly look at your credit file to know your financial commitment and repaying capacity.
- Does that mean you cannot apply for long-term loans without a credit check?
No, not at all!
We know that big expenses do not spare those who have a bad credit rating. Likely, your credit file is not good at all, and to avoid having your score further pulled. You do not want a credit check.
As you may not know of lenders who entertain applications with no credit check, we will make this process easier. We have a few lenders in our network who do not mind lending money to people who are uncomfortable with a credit check.
However, lenders will find other ways to determine your affordability. Our lender partners follow good practices, so they approve applications based on the following benchmarks:
Long-term loans with no credit check can be expensive. Ensure your affordability before applying for these loans. With the help of FastenLoans, you will get a suitable lender that lends money at fair interest rates.
FastenLoans is a loan introducer, not a lender. We have a panel of reputable online lenders that lend money at affordable interest rates. We know that everyone’s financial situation is different; therefore, the best lender for one person cannot be the best for another.
After evaluating your application, we will connect you to the lender we think is suitable for your current financial circumstances. Note that we will introduce to the lender, but the lender will carry out the entire lending process. As a broker:
As these loans' tenure is big, you can take out up to $25,000. However, the minimum borrowing amount to qualify as a long-term loan is $5,000. To determine the lending amount, the lender will evaluate your financial condition (current and future), past financial behavior, and your FICO score.
You can improve your credit rating with these loans, provided you make payments on time. The lender will report your timely payment to the credit bureau, which improves your credit rating.
Yes, you can refinance your long-term personal loan. It will let you replace your current loan with a new loan at revised interest rates and repayment terms. Refinancing is a better option under these two circumstances when:
Do not forget to consider the total amount of interest paid after refinancing. It does not make sense if you pay more than your current ones.
A few lenders charge early repayment fees, while the others do not charge any fees. You will have to ask the lender about early repayment fees. Read the terms and conditions thoroughly in the given contract.