Should you get a 15-year loan?
Is a 15-year loan right for you?
If you’re thinking about taking out a loan, careful consideration of how you’ll repay it is vital.
Balancing the lower overall interest costs of a short-term loan with the typically cheaper monthly repayments of longer-term options is what many people want. And a 15-year loan offers a good middle ground between the two.
What are 15-year loans?
A 15-year loan is a financial agreement where you borrow a sum of money and repay it over that period, plus interest. This term strikes a balance between shorter and longer loan durations.
Typically, 15-year loan terms are associated with secured loans where an asset is used as collateral, such as your home. This provides lenders with added security and can influence the terms offered.
How much can I borrow with a 15-year loan?
With a 15-year secured loan, you could access £5,000 to £100,000 to help with a wide range of things.
While the exact loan amount depends on your circumstances, it’s important to consider both your immediate needs and financial future in equal measure.
For example, opting for a £30,000 loan instead of £20,000 can help with your plans, but the additional repayments or potentially longer terms should also factor into your decision.
Loan amounts are subject to affordability checks and personal circumstances.
What can I use a 15-year loan for?
A 15-year loan offers flexibility for various financial needs. You could use one for:
What 15-year loan rates could I get?
Interest rates are influenced by a number of factors beyond just how much you’d like to borrow and how long you want to pay it back.
- Your credit score and borrowing history
- The amount you’ve applied to borrow
- The type of loan you’re applying for
- The lender’s standard rates and policies
- The value of your property used as security (for secured loans)
- Your chosen loan term
Pros and cons of 15-year loans
Compared to 20-year loans or a shorter option like a seven-year loan, how does a mid-term option like a 15-year loan stack up?
Pros
- Shorter repayment term: Opting for a 15-year loan allows you to become debt-free sooner than longer-term loan options, while still providing terms that can provide manageable monthly repayments.
- Lower overall interest paid: Compared to a 20-year loan, you’ll pay significantly less in total interest over the loan’s lifetime, despite higher monthly payments.
- Ability to increase funds: Compared to shorter-term loans, these terms may help you access more money. You can plan home improvements or business investments accordingly while agreeing to repayments that fit your budget.
Cons
- Higher monthly repayments: While still a long-term agreement, repaying over 15 years instead of 20 means larger monthly costs, especially when borrowing larger amounts. It’s important that you fully budget for this before applying.
- Still a significant financial commitment: Even though it’s shorter than a 20-year loan, a 15-year loan represents a big financial commitment that requires a steady income and financial stability.
- Risk of property repossession: Failure to maintain repayments on any kind of secured loan could result in you losing your home.
Am I eligible for a 15-year loan?
All loans have their own eligibility criteria depending on what kind you want, how much you’d like to borrow and the terms you’re seeking.
Typical criteria for homeowner loans are as follows:
- You’re a homeowner
- You’re aged between 21 and 70
- You’re living in the UK
- You’re able to afford the repayments from your income
Credit scores are not always part of the immediate criteria when judging whether you can afford to repay a loan. Using an eligibility checker will not affect your credit file.
Apply for a 15-year loan with Evolution Money
If a 15-year loan aligns with your financial goals, check your eligibility with us today. We’ve helped over 31,000 people access funds since 2011 and we may be able to help you even if you’ve been turned down for finance elsewhere.
All loans are subject to status and affordability checks. Terms and conditions apply.
Our help and advice hub is home to a wide range of useful articles that break down other financial topics to help you make the most of your money.
Representative 28.96% APRC (Variable)
For a typical loan of £26,600 over 180 months with a variable interest rate of 19.56% per annum, your monthly repayments would be £484.00. This includes a Product Fee of £2,660.00 (10% of the loan amount) and a Lending Fee* of £763.00, bringing the total repayable amount to £87,030.00. Annual Interest Rates range between 11.7% to 46.5% (variable). Maximum 50.00% APRC. *Lending Fee varies by country: England & Wales £763, Scotland £1,051, Northern Ireland: £1,736.
Think carefully before securing debts against your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
