Long Term Personal Loans
Benefits of Long Term Personal Loans
- Longer repayment period means a smaller monthly payment. Are you looking to borrow a lot of money but pay it back in small amounts every month? If so, you want to get the longest term possible.
- Lower interest rate. Since you are paying the money back over an extended period of time, you can expect a lower rate – as long as you have a good credit score and history.
- Availability. As noted above, private lenders as well as banks and some credit unions offer these loans. This allows you to find the one that is perfect for you.
Potential DrawbacksWouldn’t it be nice if everything about long term personal loans was a benefit? Unfortunately, this is not how the lending industry works.
- Pay more in the long run. Since you are opting for a longer repayment period you end up paying more in interest.
- Better chance that something bad could happen to your finances during the repayment term. This could be anything from a job loss to a medical emergency. If your financial situation changes, you may not be able to make your payment. In turn, your collateral could be at risk (if it is a secured loan).
Chris Fuller went to the University of South Florida and has worked in the financial sector for over 20 years. He has extensive experience in all aspects of personal and small business lending, from personal loans, equipment finance to cash flow based solutions for small mom and pop businesses, and large corporations.