Let Us Answer All of Your Questions
What Is A Long Term Loan?
A long term loan is a form of credit where the debt is paid off over an extended period lasting normally over 2 years. Once you have signed your loan agreement and received your credit, you will then pay back your credit and any interest you have earnt, over your prearranged loan term period.
As their names suggest, long term loan's term period can vary from anything from 1 to 10 years, so you don't have to worry about coming up with the money straight away. Some long term loans can even last up to 15-20 years, but generally, most are paid back within a timeframe of ten years and under. So, whatever you need the credit for, however rapidly or gradually you intend to pay the loan back, you can arrange a time frame around what suits your needs.
How much can I borrow?
Long term loan amounts can vary from lender to lender and are mainly dependent upon circumstances, assets and whether the loan is secured or not; but you can expect to borrow anything from around £1,000 - £50,000 for anything that you may need the credit to cover.
Different lenders all have different criteria to decide whether or not you are eligible for them to lend you money. However, commonly the essential criteria lenders look for in a customer is good credit and a reliable source of income.
Getting Started How Does A Long Term Loan Work?
Applying for a long term loan is quick and easy, and it works just as you would with any other loan. However, if it is your first time applying for a loan and you need a little guidance then don't worry! Simply follow the steps below.
How do I apply?
Once you have found the right loan that you think would suit you, your next step would be to apply and begin the application process.
Be selective; don't choose whoever offers you the best deal, make sure you do your research because in most cases if a company offer you a deal that seems to be too good to be true, then it usually is. If you follow our top tips then you should be able to find yourself the best deal with a credible company.
1. Apply Online
The easiest way you can apply is through the lender's website online, where you will be asked to fill out an online form, which is usually to identify the person who is making the application.
What information will I need to provide when I apply?
- Date of Birth
- Proof of address
- Residential status
- Employment status
- Annual income
- How often you're paid
- How much you wish to borrow
- What the purpose of the loan is for
- How long you wish to spead out the repayments
Once the applicant has submitted their application form, one of the following things will happen:
• You will instantly receive a decision through means of an email, post or via telephone.
• You will not receive an instant decision and may be asked to provide additional information to support your application.
3. Agree On Lending Amount
You will then get a chance to negotiate and agree on a loan amount with your lender. The amount you receive can depend on your credit rating, and your interest rates will also vary from person to person due to this.
4. Repay Your Loan
After you have completed these steps, and received your loan, you will then be required to repay the loan within a settlement period that you have agreed on with your lender in flexible and manageable instalments. The total repayment amount will also be including interest.
How To Make The Most Of Long Term Loans What Can I Use A Long Term Loan For?
Taking out a long term loan can vary depending on the individual and their circumstances. Whilst others needs require shorter-term credit, there are several reasons why you can opt for a long term loan. If you are interested in finding out what these reasons are, and what other uses you might have for them, then keep on reading!
The Best Uses Of Long Term Loans
Long-term loans are ideal for customers who are looking for a quick and easy solution for their financial troubles, who will be able to manage repayments by staggering them over a long-term period. Read More »
The versatility of long-term loans makes them an excellent choice for many customers, as long-term loans can be used for a variety of different reasons, which we will discuss below.« Show Less
• Launching A Business
If you have always dreamed about starting your own business but just don’t have the funds available to make those dreams a reality, then long-term loans can help you do just that. Read More »
Since the loan is long term, the repayments are spread amongst a lengthy repayment period, and therefore, the company has more money each month to spend on other uses. Long term loans can help businesses do the following- • Expand office space • Employ more people • Improve company technology and facilities« Show Less
Your wedding day is supposed to be the best day of your life. So, what better reason to take out a loan and do it properly? Read More »
They can also be extremely expensive and can seriously put a strain on your financial situation. However, because long term loans are so much more affordable to repay, and have lower interest rates than that of short term loans, they make a great option for anyone who wants to plan their dream wedding affordably.« Show Less
• Holidays And Travel
Going abroad or travelling for a long period of time can definitely put a dent in the bank. This is why a lot of people opt for long-term loans. So, if you're struggling to save up enough money for your gap year or the holiday of your dreams, why not apply for a long term loan instead?
• Home And Car Repairs
Everybody knows how frustrating it can be when something breaks at home or when your car suddenly just decides to stop working. Not having the necessary funds in your account to repair these things is what makes it ten times worse. Read More »
To avoid paying high interest rates, why not opt for a long-term loan, so you can repair whatever it is you need to affordably and flexibly?« Show Less
Do I Qualify For A Long Term Loan? Is A Long Term Loan For Me?
In this section, you'll find out whether you are eligible for a long term loan and whether it is a good option for you. If you are worried about your eligibility, then let's get cracking and see if you qualify!
Am I eligible?
In order to be eligible for a long-term loan, most loan companies will expect you to have an excellent credit rating and be in secure employment; this is to ensure that you will be able to make the repayments on the loan.
As well as this, you'll usually have to be older than 21 years of age, possess a bank or building society account in your name, and have been a UK resident for at least 3 or more years.
Although it is worth mentioning, that different lenders have different criteria to decide whether or not you are eligible for them to lend you money. However, commonly the essential criteria lenders look for in a customer is proper credit and a reliable source of income.
What if I have bad credit?
If you do not have a good credit history, there’s no need to panic that you will not be able to find a lender willing to offer you a long-term loan. If you have had missed loan or bill payments, been issued a CCJ or had to file for bankruptcy in the past, it could make finding a lender to give you a loan a lot harder, but there are still ways you can make the process a little easier.
Tips for applying with bad credit
1. Choose Your Lender Carefully
Be sure to choose your lender carefully. As unfortunately, if you are applying for a long-term loan with bad credit, you will find that many lenders are not willing to give you a loan unless you have proper credit. So, it is important to be understanding of the fact that you may only have a handful of lenders to choose from, so make sure to do your research into the company! Make sure that before you apply, they will be likely to accept your application, as failed loan applications show up on your credit file.
Don’t apply for multiple loans at the same time! This could make you appear desperate and untrustworthy when lenders look into your credit file, and this can be a massive red flag to potential lenders.
A long term loan calculation tool is helpful when looking at what sort of repayments you will be able to afford; these will usually be on lenders websites. If a company doesn't have a loan calculator tool, you can also use the APR that’s advertised on lenders websites to work out the cost.
2. Improve Your Credit Score
Improving your credit score improves your chances of getting a good deal on your loan massively. So, if you do not need a loan right away, improve your credit score before applying. Read More »
However, if you still need credit urgently, your options are to try either a short-term loan or a bad credit history credit card. Providing that you make all your repayments in full and on time, you'll be able to give your credit a well-needed boost, increasing your likelihood of getting a long term loan in the future.« Show Less
3. Secure Your Loan
Try considering security for your loan. Lenders always want to be sure that if they lend the money, that they will be sure to get it back. Read More »
Moreover, the worry with customers with bad credit is that they will not get the money back, which is why they find lending credit to bad credit customers quite risky. However, if you are in a position to own assets, then you could use them as security for your loan. By using your assets (such as your home or your car), you could put lenders worries at rest, as they know they could recover the costs of the credit if you could not keep up with the repayments.« Show Less
Top Tips On Getting The Best Deal How To Get The Best Long Term Loan
With online lending being so popular, there is so many loans on offer nowadays. So, how would you know which one is the best deal? Lucky for you, I have compiled the best tips to help score you the best deal on the market!
How do I get the best deal?
When applying for any loan, you always want to check that you are getting the best deal possible. So before applying for a long term loan, you should always make sure you take the right steps before doing so, to ensure you get the best deal.
– Compare Your Options
There are plenty of loan brokers and price comparison websites that are available to help you to compare deals, although for some loan companies you still may have to go direct. Read More »
When looking at deals make sure you take all the terms, fees and rates into consideration, as choosing the wrong agreement could make your financial situation worse as opposed to better.« Show Less
– Don't Make Multiple Applications In A Short Space Of Time
When searching for loans, be aware of the fact that if you make multiple applications to multiple loan companies, then it will show up on your credit file and for many potential lenders this can be a red flag as you can appear desperate and untrustworthy.
– Try For An Unsecured Loan
Although there are benefits to a secured loan, it may be a safer option to opt for an unsecured loan if you have the choice, especially if you do not want to risk losing your assets or you do not have any.
– Make Sure That The Lender Is Genuine
One of the biggest worries when looking for a loan is how can to tell if a lender is genuine or not. Although it is a real concern for borrowers, it is relatively easy to find out whether a company is reputable or not. Make sure you do the following to ensure the trustworthiness of a lender:
- Resarch the company beforehand When researching any loan companies, you should be able to find reviews of the company and its services online through reliable sources such as Trust Pilot and Google. Look at their overall score/rating and the types of comments they are getting. You can usually allow for a few bad reviews even with a good company. However, if all their reviews or a large number are negative, it would be a safe assumption to say that you should steer clear of this company.
- Make sure they are FCA approved You should also check that they have a UK registered company address and telephone number, and are regulated by the FCA.
Look at the way they interact with any negative reviewers. If they blame customers, argue or ignore them altogether, then you should be wary. Even good companies may have a few negative reviews but will always seek to resolve any disputes with unhappy customers.
What else should I look for in a Lender?
If you are in the process of looking for a long term loan, you want to make sure you have got a lender whom you can trust and whom you know will look after your best interests. So here's some essential information on what you should look for in your search for a potential lender.
• Affordable Borrowing
If you are considering applying for credit, then it is necessary to keep in mind if you can afford it. Read More »
If a lender offers you a great deal on a personal loan, but you still cannot afford it, then there's no benefit to be had from accepting it; as you will only find yourself in worse financial circumstances than you were before you applied for the loan. Make sure you're realistically looking at how much you can afford to borrow and pay back in instalments, it is also important to take into account other household bills and personal expenses that can affect your affordability. Also, consider if your circumstances are likely to change within the term of the loan. « Show Less
• Reputable Reviews
Make sure you look at the reviews, as rates are not the only things that can indicate a highly regarded lender. Read More »
• Online Safety and Security
You will need to ensure a lender is legitimate before you apply, as you will be handing over sensitive data. Read More »
Therefore, it's crucial that not only do you make sure that you check reviews but also that you check that the company and it is products are regulated by the FCA (Financial Conduct Authority). That way if anything goes wrong between you and the lender that can't be resolved, you will be able to ask the financial ombudsman to mediate the dispute. The financial ombudsman deals with any complaints between consumers and companies providing financial services that are regulated by FCA. This means that in the events of a dispute that arises between you and your loan company, you will be offered help and advice, and the ombudsman will mediate the dispute, all for free. You should be able to find out if a lender is FCA regulated by checking their website or by looking at the free FCA register.« Show Less
Could you benefit from a Specialised Lender?
Many companies who offer long term loans specialise in particular areas, such as poor credit and unsecured loans. Read More »
Therefore it could be worth looking into specialist lenders if your circumstances or needs warrant a more specific approach; that way you will be sure to find a lender who will be willing to offer you a loan to suit your needs.« Show Less
Tips for Boosting your Credit Score
Having a good credit score is extremely important. Not only are you more likely to get accepted for a loan, but you are also more likely to get a better deal than others with a poor credit. Read More »
So, you will always benefit from taking the necessary steps to becoming more credit-worthy.« Show Less
• Check Your Credit File Is Correct
Check your credit file online, as it is essential that you be aware of any outstanding debts you may still have. Read More »
It is also important to look out for any information that might be missing or incorrect on your file. As false or inaccurate information could further hinder your score.« Show Less
• Reduce Your Debt
Make sure you keep up with payments, ensuring that they are paid in full, on time and regularly. If potential lenders are worried that you will not pay your debts, show them that you can.
• Build Up Your Credit
If you have no credit at all, make sure you take out a credit card and repay it in full each month. As having no credit at all can be as bad as having a bad credit rating.
• Contact Your Creditors
If you are struggling to pay your bills in full and on time, make sure you get in contact with your creditors, or alternatively get in touch with a credit counsellor who will be able to help you come up with a repayment schedule to make your payments more manageable. Read More »
If you have bad credit and are looking to see whether you would be eligible for a loan, there are soft credit search tools such as eligibility checkers and calculators that you can use to check if you are likely to be accepted or not. These checkers such as the one one Money Saving Expert are helpful because not only are they free of charge but they won't show up on your credit file.
We're a fully regulated and authorised credit broker, not a lender. We compare rates from our panel of over 80 direct lenders to get you the lowest APR possible!
Benefits And Drawbacks Pros And Cons Of Long Term Loans
Now you understand all about long term loans; you should be able to make an informed decision on whether or not a long term loan would benefit you and your circumstances by taking a look at the advantages and disadvantages!
What are the advantages of long term loans?
• Quick Fix
It can be a quick fix if you are in need of cash today and know that you will be able to afford to pay off your loan and the interest in the future; then a long term loan is a perfect solution to you.
• Quick Decision
You can get a quick decision. Once you have applied for a long term loan, you will usually hear back from the lender within 24 hours, with some even replying with a decision in minutes. So, you will not have to spend days worrying about if you have been accepted or not.
• Do Not Require Lots Of Additional Information
You do not need heaps of documentation to apply. Read More »
Typically, you can apply with only your financial and work information, as well as your credit history, and most lenders will be able to make an informed decision on the information you provided. However, some lenders may ask for additional information to support your application. « Show Less
What are the disadvantages of long term loans?
• High Interest Rates
You might get high-interest rates if you are a potential applicant with bad credit / a low credit score. Read More »
Because of this, you should always check the interest rates on your loan, as some lenders could make you pay extremely high prices. As well as this you could only receive only a portion of the amount that you need because of your bad credit, so always pay attention to the rates lenders offer you, as it may not be the best deal.« Show Less
• May Be Hidden Information
Always read the terms and conditions for information about charges. Although it is tedious as they can tend to be somewhat lengthy, it could save you from any unwanted surprises, such as early redemption charges. Read More »
If you are aware of additional costs or fees that could be applied, you can opt out in the cooling off period, or you will know how to avoid the charges in the future.« Show Less
• Your Assets Can Be Seized
If you cannot keep up with the repayments, then your creditor can take you to court to reclaim their money back, which will usually be done by seizing your assets. Read More »
So to avoid this, it is recommended that you only borrow an amount that you can afford to pay back at an affordable rate.« Show Less
• Higher Decline Rate
If you are applying for a long term loan with bad credit, you need to be aware that you are likely to be declined from a number of different lenders, so make sure you are aware of your credit score before applying for a long term loan. Read More »
There are some reputable websites such as ClearScore and Equifax that you can use to check your credit score online. As well as this, it is important to remember that each application for a loan that you have rejected will show up on your credit score and could warn off other potential lenders.« Show Less
Is there an alternative to long term loans?
As well as their appeal, long term loans are also a lot more convenient than their alternatives such as payday and short term loans. Although payday and short term loans do serve a purpose for some, they are not as good in the long term as namesake long term loans are.
Firstly, payday loans are usually paid back within a month on your next payday and allow you to borrow a small loan which would amount to no more than your monthly salary. Although this might help you until payday, it can be of little help to you if you need to borrow an amount of money which is more than your monthly salary.
Secondly, although short term loans have more extended borrowing periods than payday loans, you still must pay back the loan typically within a year, which can be tricky if you wish you borrow a sustainable amount of money as you could struggle to pay it back within that timeframe.
Frequently Asked Questions FAQ's
Still have some burning questions about our long term loans? Find the answers below!
What does APR mean?
The APR or the 'annual percentage rate' aims to show you an example of how much you will be paying annually. This is expressed as a percentage, once all the charges, fees and interest rates have been applied. Companies are legally obliged to show their APR rates on their loans so that you as a potential customer can make comparisons with other loans that their competitors are offering.
So, if you find a loan with a low APR, then it is probably a cheap long term loan.
Acceptance rates are the overall number of people, as a percentage who have had their application approved, regardless of the APR charges.
What is a cooling off period?
The 14-day cooling off period refers to the period of time you have to cancel your loan after signing the agreement. This is vital to remember, as if you have a bad feeling about any repayments or see something in the terms and conditions you are not sure about, you have the right to cancel the loan during this time.
What is a debt consolidation loan?
Some people will use a long term loan to cover the costs of a debt consolidation. Debt consolidation loans refers to a lending option you may use if you have a lot of small debts with a few different creditors. This is when someone takes out one large loan to pay off a few of their smaller debts. This can be useful as it makes paying back the debt cheaper and makes managing the debt more manageable.
Can i repay my loan before my settlement date?
Yes. If you can afford to pay back your loan faster than you expected, you could be made to pay an early redemption charge. This is a charge that is added to your debt to cover the costs of the interest that you would have paid on the loan, had you paid it back in the time it was scheduled. Usually, the longer you have left on the loan, the higher the early redemption charge will be. You will often agree to pay an ERC in your terms and conditions when you take out the credit, so be aware if you are considering overpaying or repaying your loan in full sooner than expected.
What is payment protection insurance?
Also commonly referred to as PPI, this is an optional insurance that can be added to your loan as security against ill health, accidents and redundancy in the event that you would not be able to repay your debt. PPI is not compulsory, and companies are not allowed to sell you PPI if you do not want or require it. PPI has been given a poor reputation in recent years due to it being missold, but if you are taking out a sizeable long-term loan and want security for the future, then PPI could be an option you might want to consider.
What is the difference between a secured and unsecured loan?
You may have the choice of whether you would prefer a secured or unsecured long-term loan, depending on your assets and how much you would like to borrow.
If you take out a secured loan, you are required to secure your loan with collateral, such as your home or vehicle, in order to get it. An unsecured loan, on the other hand, does not require that you secure the loan with any of your valued possessions.
How much can i borrow?
We always aim to be flexible. This is we lend anything between £1,000 and £20,000.
What happens after i apply?
After you have applied for a loan, a few things can happen. If you have had your application for a loan accepted, then you will be sent documentation that you will need to sign for the funds to be released and paid into your bank account. However, if you have not been successful you will receive an email notifying you that you have been unsuccessful.
How long will it take for the money to reach my account?
How long it takes for the money to be deposited into your account depends on a few different factors. For instance, if you applied for your loan online, you can expect to receive the funds within 48-72 hours.
However, if you applied via telephone, then the process could take up to 3-5 business working days. There is no set time for lenders, but you will be pleasantly surprised to find that the vast majority of lenders offering long term loans do offer an extremely prompt service.
What happens if my application is denied?
If your loan application is refused, then you will receive some follow up correspondence regarding as to why you were rejected, along with the details of credit reference agencies. This will allow you to view your credit file to see why you were refused a loan.