Long-term Loans

A long-term personal loan can have a term of 72 months or even longer. For example, some lenders offer 120-month personal loans. Because of the longer loan term, a lender may charge higher interest rates. However, since the monthly payments are spread over a longer period, you are likely to have a lower payment.

10 Best Long-Term Personal Loans

Long-term personal loans have repayment terms of more than five years. Although you will have smaller monthly payments, the total interest may be higher.

Most unsecured personal loans have terms between one and five years. Longer-term personal loans have longer repayment periods, usually up to seven years. Some banks, online lenders, and credit unions offer long-term personal loans.

Advantages of taking out a long-term personal loan

  • Larger loan amounts: When you want to borrow a large sum of money, perhaps for a home improvement project or to consolidate debt, lenders may give you the option of a longer-term to repay the loan.
  • Lower monthly payments: Loans with longer terms will have lower monthly payments than loans with shorter terms. However, the benefit of having a longer term may be offset by a higher interest rate. Choose a monthly payment you can afford, but consider both the interest rate and the term of the loan when applying for a loan.

Disadvantages of taking out a long-term personal loan

  • Higher interest rates: Lenders may charge higher rates for longer-term loans because they are considered riskier. The longer you have to repay a loan, the greater the chance that your money situation will change in a way that prevents you from repaying the loan as agreed.
  • More interest: Unless you repay the loan early, you will pay more interest over the life of the loan than you would with a shorter-term loan.
  • Your finances may change: Your financial picture is likely to evolve over the course of six to seven years. Having long-term debt means you may have to make trade-offs with future financial decisions.

When to consider a long-term personal loan

A long-term loan is ideal when you borrow a large sum of money and need more time to pay it back. You may need to borrow $50,000 for a major home improvement, such as a kitchen remodel, and a longer-term will reduce your monthly payments.

If you want a long-term loan to consolidate multiple debts into one payment, consider this first: a debt consolidation loan works best if you get a lower interest rate than the combined interest rate on your existing debt, or if the loan allows you to get rid of debt faster than your current pace.

For example, if you know it will take 10 years to pay off your cards, a seven-year consolidation loan may be a better option. Use our debt consolidation calculator to estimate potential savings before opting for a loan.

Where to get a long-term personal loan

Banks: Discover, Wells Fargo, USAA, and U.S. Bank offer loan terms of up to seven years. If you have a good relationship with your bank, you may be able to qualify for other benefits, such as lower rates or larger loan amounts. Banks usually look for borrowers with good credit (a credit score of 690 or higher).

Credit unions: First Tech Federal Credit Union offers loan terms of up to seven years, while Navy Federal Credit Union offers up to 15 years for home improvement loans. Credit union personal loans tend to have low rates and flexible loan features. Although you must first join the credit union before applying for a loan, most credit unions consider borrowers with fair and poor credit (credit score of 689 or lower).

Online lenders: Only a handful of online lenders offer longer loan terms, including LightStream, SoFi, and Upgrade. These lenders cater to borrowers with good credit, with the exception of Upgrade, which accepts borrowers with bad credit (credit score of 629 or lower). Online loans are fast and convenient, and borrowers generally receive funds within a few days.

Next steps: Check rates on long-term personal loans

To get a long-term personal loan, you’ll first want to pre-qualify with some lenders. Prequalifying gives you a preview of the loan offers you might receive, without affecting your credit score.

You can pre-qualify with lenders on FundingHall to see if you are approved for a loan and, if so, at what rate. Once you’ve pre-qualified and compared offers, you can apply for the loan.