A simples guide

Compare Long Term Loans

‘Long-term’ is fairly vague. It can mean different things to different people. Time is relative, after all! This applies to the financial world too. A long-term loan can range from a couple of years to a decade or two. Our guide to long-term loans will help you to understand what long-term loans are and whether they are right for you.

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What is a long-term loan?

Borrowing money over a specified period with a pre-planned payment schedule equates to a long-term loan. Repaid over a lengthier period, the monthly repayments are lower than short-term alternatives. Despite having more manageable repayments, you may pay more interest.

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Is it possible to get a long-term loan with bad credit?

Having a bad credit score has far reaching implications in today’s society. It can prevent you from becoming a homeowner, or getting finance on a car for example.

If you’re struggling with your existing debt then a long-term loan may help. Long-term loans for bad credit can consolidate debt and reduce monthly outgoings significantly. Rather than repaying numerous debtors varying amounts, you will have one monthly amount. It is difficult to understate the positive effect of knowing exactly how much you owe each month.

Regardless of the benefits there are some downsides you may need to consider. Some providers will only offer long-term debt consolidation under secured arrangements where you may use your home as security. However, you could lose your home if you fail to make your repayments. Of course, there is something else to think about. Taking out a long-term loan could extend the term of your original loan. In this case, you are likely to pay more interest. 

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What is an installment loan?

The name says it all. You borrow a sum of money and then repay that total, plus any interest accrued, over a set period of time. You and your lender will have predetermined a payment schedule. Sometimes the payments will remain the same each month. Occasionally, the repayments will be incremental. That depends on the conditions set out in the loan agreement.

Are long-term loans cheaper?

Lower monthly repayments do not always equate to long-term finance being cheaper. You could end up paying more interest than you would under a short-term agreement. Whether this additional interest is justified depends on your circumstances. If you can afford the higher repayments, a short-term loan could be preferable.

It’s worth noting that some long-term lenders could actually charge you for early repayment. This is not always the case but it is another reason to consider short-term lending. To avoid this, compare lenders who won’t charge you for settling earlier than scheduled.

Are long-term loans cheaper?

Lower monthly repayments do not always equate to long-term finance being cheaper. You could end up paying more interest than you would under a short-term agreement. Whether this additional interest is justified depends on your circumstances. If you can afford the higher repayments, a short-term loan could be preferable.

It’s worth noting that some long-term lenders could actually charge you for early repayment. This is not always the case but it is another reason to consider short-term lending. To avoid this, compare lenders who won’t charge you for settling earlier than scheduled.

What are the benefits of a long-term loan?

You may need to take out a loan for vehicle or home repairs. Perhaps you just need a holiday. Whatever your reason, there are a multitude of reasons to opt for long-term loans online. Some of the benefits include:

- Flexibility. You can find long-term loans ranging between hundreds to tens of thousands of pounds. You can also choose a loan term which you are comfortable with

- They could have a lower APR than short-term loans. Payday lenders, for example, can have interest rates exceeding 1,000%

- Long-term loans can resolve emergencies, where you need money urgently. They can also be used as a way of preserving your savings. By paying an affordable, monthly amount, you may be able to keep saving

If you can afford the repayments, the advantages of a long-term loan can be plentiful. As with any other borrowing, however, it is vital that you’re careful. Decide whether borrowing is the right option for you. Consider alternative funding if possible. If you do opt for a long-term loan, make sure you can fully understand the terms and can afford the repayments.

How can I find a long-term loan?

You can compare a vast number of long-term loans online with our comparison service. With just a few clicks, you can find the long-term loan that is right for you.

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