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All You Need To Know About Long-Term Loans

The internet is awash with many loan companies. Their loan products are many and diverse. You may be excused for finding it hard to figure out the right product for your needs.

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your FICO® credit score!

Long-term personal loans are good options when you are in a situation where you require a loan that you can slowly pay off over several years. It’s an important undertaking that has the potential of affecting your financial standing for a long time. That’s what makes it all the more important to understand each facet of this product.

What do we mean by long term personal loans?

In online lending circles and on most loan websites, any loan that has a loan term of more than 12 months is considered a long-term loan.

Among traditional lenders, long term loans for bad credit are classified as loans that have durations ranging from 5 years to 12 years or more. Now, past seven years, it is quite rare to encounter a 10-year personal loan or 15-year personal loan.

Mortgage loans, for instance, are perfect examples of long term personal loans. That’s because they have repayment terms of up to 30 years. Student loans, alike, have lengthy loan durations.

When should we consider using these loans?

There two main situations where you can consider this loan:

1) When you need a large loan amount

In some situations, only a large loan sum will suffice. For instance, if you have piling medical bills that must be off-set with a loan or when you’re undertaking a home renovation project. Even fixing your car, for instance, a key component like the transmission can set you back a couple of thousand dollars.

Some online lenders are offering loans with max amounts of up to $25,000, $35,000, and $50,000. If you get a favorable interest rate, you can even use these loans to take advantage of investment opportunities.

2) When you want low monthly payments

It is better to explain how this works with a handy example. Now, assume you want to borrow $20,000. Also, presume that you’re earning about $4000 each month. After all deductions, you’re left with a discretionary income of $1000. What’s more affordable: borrowing the $20,000 loan for one year or five years?

Loan parameters One year Five year
Loan amount
Interest rate
Monthly payment amount
Total Interest
1 year
5 years


Now, the loan is clearly more affordable when you choose to repay it over a longer duration. In fact, the interest amount seems to double each year it’s left to accumulate.

With a personal loan, there is a trade-off between affordable monthly installments versus paying less in interest.

Why having a manageable loan repayment is important

1) Less risk of default & late payments

Late payments result when you fail to pay a repayment on time. You might be asking: How many days must have elapsed for a repayment to be considered late? It is between 5 to 15 days. What happens afterward? The borrower must pay a late payment penalty.

If 30 days pass after you have failed to honor a loan repayment, most lenders will consider your loan to have entered into default. The loan is referred to a collection agency.

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your FICO® credit score!

Collection agencies will take on the responsibility of collecting on the loan. For instance, some loan collectors will call you at your workplace. Others send their agents to come knocking on your door asking questions.

2) Minimum disruption to your budget

Any added obligation to your monthly budget may disrupt your well-choreographed budget. Taking on the burden of expensive installments means that you have to make major disruptions to your lifestyle. On the other side, a long-term loan has more manageable installments that don’t require you to implement major changes.

What are the pros of long-term personal loans?

First, there are two ways of getting loans nowadays:

→ Traditional: With the traditional way, you obtain a loan by visiting the lender's premises. You then get to sit with a loan officer and fill out an application form. It might be several business days before you hear from the lender on whether you have been approved.

→ Online: Brought about by the advancement of the internet, online loans come with many advantages. It makes them more advantageous than loans offered in-person. Some of the pros are pegged on how lenders operate. So, here are the benefits:

1) Easily obtainable

Regardless of where you are or the device you’re using, you can access online loans easily.

2) Fast funding via direct deposits

Customers should expect a fairly quick loan application procedure when they apply for online loans. Most lenders offer direct loan deposits to your bank account via ACH (automatic clearing house). It typically takes 24 hours to receive funds in your account.

3) Fewer loan restrictions

If you have bad credit, it’s no impediment to getting an online long-term loan. In fact, the lender might be more inclined to lend cash to you because it’s harder to default on loans that have affordable monthly payments.

When should we avoid long-term personal loans?

Generally, avoid longer personal loans if you don’t have a clear repayment plan. You should avoid them if you don’t have a solid reason for seeking credit. In other words, don’t just borrow for the sake of getting money for trivial uses. If you have other alternatives sources of financing such as applying for zero interest rates, you can opt for them instead.

How to apply for a long-term loan?

First, ensure you meet the basic requirements; have an SSN number, past income stubs, bank account statements going back 60 days, state or government-issued IDs, street address, etc.

Applying does NOT affect

your FICO® credit score!

After sending out the loan request form, you get pre-qualified and receive loan offers in your email in as little as 5 minutes.

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Frequently Asked Questions

1. What’s the longest-term for a personal loan?

Long-term loans are considered to have terms that are more than five years. However, loan terms of many more years are expected, for instance, 7 years. But is this the longest-term possible?

Not quite, there are very few loan providers that have a longer-term of more than 10 years.

For instance, the Navy Federal Credit Union gives its members loans with terms as long as 15 years.

Now if you can’t find a personal loan with a term of up to 15 years, you can consider other borrowing options, for example, a home equity line of credit. Since it’s secured on property, it might even come with a term of up to 30 years.

2. Can I get a personal loan for 10 years?

It is quite possible to find a 10-year loan, though it will be very difficult to do so. The easiest option would be a duration of 3 years, 5 years, or 7 years.

As you speak to different lenders, you may ask if they offer a nonstandard term. The advantage is that you’ll have lower monthly payments that will be very affordable even if you take out a large loan.

3. How many years can I get a personal loan?

With standard loans with monthly payments, the common loan duration range is 1 to 7 years. Now, if you have a bad credit score, you might find short term loans with terms of several months.

The reason to consider getting more years to repay the loan has to do with making the monthly payment more manageable. Another reason is if you need a substantial loan amount.

4. What is considered a long term loan?

Any loan with a duration of more than 5 years or 60 months is considered to have a long-term.

5. What are the cons of long-term personal loans?

Just as they are advantages to the longer-term, there are cons as well. First, not many lenders are willing to offer these credit options, which leaves customers with few options.

Secondly, with more monthly payments on your hand, you will have more chances to make late payments that could harm your credit score considerably.

Thirdly, the borrower is stuck with debt for a longer time. Many people ultimately dream of being rid of the burden of debt.

6. How can you determine the monthly payment amount?

First, you need to find out some things: the loan amount, interest rate, and duration.

Next, just find a free loan calculator. It allows you to plug in these figures and instantly shows you the monthly payment amount, total interest payable, etc.

For instance, using a loan calculator from IQ, we found out that a $30,000 loan with a term of 10 years and an interest of 10% leads to monthly payments of $396.45. The total interest payable is $17,574.

Now, if the term was five years, the monthly payment would be $637.41 and total interest is just $8,245.

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