Technically, a long-term personal loan is any loan with a repayment term of 24 to 144 months — that is, 2 to 12 years. Typically, the longest terms are only available on the highest loan amounts. For example, you may have to borrow $50,000 to $100,000 to get a 10- or 12-year term.
When choosing a personal loan term length, always opt for the shortest term possible with monthly payments you can afford. The shorter the term, the less interest you’ll pay in the long run. You’ll also likely get a better rate with a shorter term loan.
Many types of lenders offer long-term personal loans, including banks, credit unions and online lenders.
If you don’t have a lot of time to search, you can compare offers from multiple lenders at the same time by using a connection service like Monevo or LendingTree.
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How we picked theseThe Finder Score crunches 6+ types of personal loans across 50+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.
With lower rates than a credit card, a long-term personal loan can be a great tool for consolidating debt or covering a large, one-time expense. Ideally, a long-term personal loan should help you save money compared — at least compared to the alternative. Here are some common ways to use a long-term personal loan:
If you have a credit score above 670 — what lenders consider good credit — you could have an easier time qualifying for low enough rates and loan amounts to make a long-term personal loan worth it.
Long-term personal loan rates can range from 6% to 36% APR. The average interest rate on a 2-year personal loan was 11.21%, according to the Federal Reserve, though rates are likely higher on longer terms. In addition, some lenders charge origination fees of 1% to 10% on their long-term loans – but not all do, especially if it’s a lender that caters to good to excellent credit.
By comparison, payday lenders and installment loan providers — also known as short-term lenders — charge APRs that can exceed 600% and don’t offer terms longer than a few months or a year.
Lengthening your term can lower your monthly payment. But the longer your loan term, the low the more you’ll pay in interest. This is partly because a long loan term allows more time for interest to add up.
On top of that, lenders also tend to charge higher rates for longer terms — meaning those monthly savings just might not be worth it. These examples show how the monthly and total interest cost of a $10,000 loan varies depending on the term.
| Loan amount | Term | APR | Monthly payment | Total interest paid |
|---|---|---|---|---|
| $10,000 | 24 months | 6.0% | $443.21 | $636.95 |
| $10,000 | 36 months | 8.5% | $315.68 | $1,364.31 |
| $10,000 | 48 months | 9.0% | $248.85 | $1,944.82 |
| $10,000 | 60 months | 9.5% | $210.02 | $2,601.12 |
| $10,000 | 72 months | 10.0% | $185.26 | $3,338.60 |
| $10,000 | 84 months | 10.5% | $168.61 | $4,162.97 |
While extending your loan term from 24 months to 84 months may more than cut your monthly payment in half, you’ll pay over six times more in interest over the life of the loan.
The cost of a long-term loan varies depending on the loan amount, rates and terms you apply for. Use our calculator to see how changing the term affects the monthly and total amount you pay in interest over the life of the loan.
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Weigh the main benefits and drawbacks of this type of financing before you apply.
While you’ll pay less interest with a short term personal loan, it really depends on your needs. If you need to borrow less than $10,000 and can pay it back in two or three years – a shorter term loan could work well for you.
On the other hand, if you need to borrow more than $10,000 and want smaller monthly repayments, a longer term loan may work better for your monthly budget – even though you’ll pay more interest over the long run. Longer loan terms give you more flexibility with monthly payments, especially if a lender doesn’t charge a prepayment penalty.
Requirements vary from lender to lender, but generally, you must meet the following criteria to get a long-term loan.
Your credit score and income can also affect your term. You’ll have the most options with a good credit score. The lower your credit score, the higher your interest rate, which can make the monthly repayments on a long-term loan unaffordable.
Ask yourself these questions when comparing lenders.
It’s possible to get a long-term loan when you have bad credit. Some lenders – like Avant, Upgrade, Upstart, OneMain Financial and Oportun – cater to fair and bad credit borrowers. But how much you can borrow and for how long depends on your current earnings, employment history and how much debt you have.
But the lower your credit score, the higher interest you’ll be charged, plus origination fees, which can reach up to 10%. If your score is below 620 and you can’t secure a fair rate, it may not be worth it. Here are some alternatives to personal loans that may be cheaper.
Get a long-term personal loan by following these steps:
If you apply with an online lender, bank or credit union that you have an account with, you can receive your funds as soon as the next business day. Otherwise, it could take a few business days or even a few weeks.
Long terms may be a good choice for larger loan amounts – but you could save hundreds or thousands in interest if you choose a shorter term. For example, if you choose a $50,000 personal loan at 11.08% with a 5-year repayment term over a 10-year repayment term, you’d save a whopping $17,575 in interest.
That’s money in your pocket that could go towards a number of things, including a down payment on a home, your education or a once-in-a-lifetime vacation. Compare personal loans to find the right fit for your lifestyle and budget.
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WILL YOU HELP NAMIBIANS ?
Hi Virgina,
Thanks for leaving a question on finder.
Unfortunately, the lenders featured on our website only caters to residents from the US, Australia, UK, Canada and New Zealand. You will have to check with your local lenders in Namibia if you are not from those 5 countries I mentioned. Sorry about that and I hope you find what you need.
Cheers,
Joel