All You Need to Know About Long Term Loans
Long term loans are used to borrow large amounts for big expenses. They’re a big commitment, but paying the money back is easier because you make regular, manageable monthly repayments over a long period.
There are many situations in life when being able to borrow money can really help, and long term loans can be helpful for lots of things. With these loans you usually borrow a large amount of money but then pay it off over a much longer period than with a short term loan. With a long term loan, you’ll make repayments for at least a year. Payday loans, in comparison, usually get repaid within 3-9 months.
In this guide, the Cashfloat team will cover everything you need to know about long term loans. We’ll look at loan amounts, interest rates and repayment conditions. As well as this, we’ll look at the advantages long term loans offer over other forms of borrowing, the types that are available and whether or not you can get one with a bad credit score.
What you get with a long term loan
The precise nature of any long term loan product will vary according to the lender you borrow from. It will also vary according to your circumstances and how you want to borrow money. However, all long term loans usually have the same basic features.
Here they are:
Larger loan amounts
Long term loans are usually used to borrow large sums of money. When someone needs to fund a large purchase, such as buying a home, buying a car or paying for a wedding, for example, they’ll often take out a long term loan for a large sum of money. It is possible to borrow a small amount with a long term loan, but most people use these loans to borrow five or six-figure sums.
Lower interest rates
When you compare loan types, another difference between short term and long term loans is the interest rates. If you look at long term loans that are being advertised, they’ll normally have a lower representative APR than short term loans or payday loans. This is because, with a longer repayment period, long term loan providers can offer better rates but profit from the large number of payments.
Monthly repayment instalments
Long term loans are also referred to as ‘long term instalment loans’ because they are almost always paid back in regular monthly instalments. Someone who takes out a home loan with a repayment period of 20 years, for example, will pay back a set amount of that loan each month for 20 years.
Can you get a long term loan with a bad credit score?
Being accepted for a long term loan might be more difficult if you’ve got a bad credit score. Many long term loan lenders, including banks, set quite high standards for their loan applicants. It does depend how low your credit score is, though, and some mainstream lenders may offer you a loan. There are also specialist lenders for people with a bad credit score that you can try. Where it is possible to get a loan, having a bad credit score will often mean you can’t borrow as much and that you have to pay more interest.
If you need a quick cash injection, an alternative could be to opt for a short term loan from Cashfloat. We offer various different types of loan, including payday loans, unsecured loans and small business loans. Our loans have less strict eligibility requirements than most long term loans. As well as being more accessible, our loans offer other benefits. You get flexible repayment terms and the option of paying the whole loan back early so you’re only charged for the days you had it.
Here are the eligibility criteria for a Cashfloat loan:
You must be over 18 years of age
You have to have a valid UK bank account
You must be a UK citizen
You need to have a steady source of income
If you meet our criteria, you can go ahead and apply today.
What are the different types of long term loan
There are a number of different types of long term loan, and they can be used for many different purposes, including both business and personal purposes. Examples include home improvement loans, student loans and loans that are used to consolidate debt.
Here are some of the most common long-term loan types you can apply for:
Long term home loans
Normally, people only look for the best lenders or credit brokers for a home loan. These loans are usually used for purchasing a home, whether it’s a newbuild house or a resale home. Otherwise, they might be used for building a new home from scratch or renovating an existing one.
Long term car loans
The price of new cars rises every year. In response, using quick approval for a long term loan to pay for a new car has become more popular in the UK. Using a loan can be an excellent way to upgrade to a new model of vehicle without having to save or spend a considerable amount in one go.
Long term personal loans
Long term personal loans are another type of long term loan. Personal loans are used for all kinds of unique purposes. Some people use a long term personal loan to pay for a wedding or they might be used to pay for a vacation, for example.
Long term education loans
Student loans and other loans for education are important in today’s world. Education is expensive and lots of jobs can only be done with certain types of education. Student loans offer very long repayment plans, giving the recipient time to pay back what they owe during their career.
What are long term loans UK?
In the UK, long term loans are typically defined as any loan that has a repayment period in excess of one year. These loans are designed to finance big expenses (usually, with at least four figures). Examples of their use are to consolidate debt, to make home renovations or to pay for business expenses.
Can you get a long term loan with a bad credit score?
It is possible to get a long term bad credit score loan. You just need to find a lender who will offer you one. Note that, while it may be possible to get a long term loan with a bad credit score, it will probably come with a higher rate and a lower borrowing limit.
Can I get a long term loan with no credit check?
The Financial Conduct Authority (FCA) does not recommend using lenders that don’t perform creditworthiness checks before approving customers for a loan. Lenders that do usually aren’t FCA authorised, and they don’t care about your financial safety. Stay away from these lenders and always make sure to apply with a fully authorised and responsible lender instead.
Do I have to be a homeowner to get a long term loan?
No, this is not a requirement. Non-homeowners can still get long term loans. However, homes are often used as collateral for long term loans. If you aren’t a homeowner, some lenders will require a guarantor or another form of collateral, although this isn’t always the case.
Is it better to get a long term loan or a short term loan?
It depends on your needs. Short term loans, such as payday loans, usually have higher interest rates but are paid off sooner. They’re often good for small amounts of money. Longer term loans have lower interest rates, but you may have to provide some sort of collateral and they’re a bigger risk if you can’t pay them back.
What is a long term loan?
As the name implies, a long term loan is any loan that is paid off over a long period of time. Usually, any loan with a repayment period over one year is classed as a long term loan.
Long term loans are normally used to borrow large amounts of money. Houses, cars and home renovations are all things that are paid for with long term loans. People borrow large sums of money and make a long term commitment to paying it back.