Learn how you could benefit from a long term loan.
What are the benefits of a long term loan?
A long term loan is generally repaid over 12 months or more. If you’re considering a secured loan, our guide explores how a longer term could benefit you.
A long term loan offers a variety of benefits. From potentially lower APRs to smaller repayments, see how a long term loan could be a good choice.
What is a long term loan?
Put simply, a long term loan means you’re repaying the total cost of the loan over a long period of time. Depending on your lender, you could spread the cost of your loan over decades.
What are the benefits of having a long term loan?
While it will depend on your personal circumstances, a long term loan could benefit your finances. Here’s how:
Affordable repayments
Repaying the cost of your loan over a longer period can often mean lower monthly repayments. As you’re spreading the total cost over many months, you could keep your repayments low and manageable.
This makes long term loans attractive for people looking to limit their outgoings and have more available income each month. However, it’s important to be aware that you may pay back more overall due to the amount of interest.
Financial flexibility
A long term loan allows you to focus on other commitments you may have. Lower repayments could give you more financial breathing space should anything affect your finances, like a poorly pet or a faulty boiler.
Lower interest rates
While some payday or short term loans of less than 12 months could have an APR over 1000%, long term loans often have lower APRs. As you’re spreading the loan over a longer period, the total amount of interest is spread more thinly than with short term loans. This could mean lower APR and repayments on a monthly basis.
The choice to repay your loan earlier
Choosing a long term loan could give you more flexibility to repay the loan earlier than planned.
Let’s say you receive an inheritance or a substantial pay rise in a few years’ time. Choosing a long term loan gives you lower repayments for now, but with the potential to repay your loan earlier should your situation change for the better. Equally, opting for lower repayments now can be a safer option should your finances change for the worse.
At Evolution Money, you can choose to repay your long-term loan sooner than planned if your finances have improved.
Long term loans vs short term loans
Wondering whether to choose a short term or long term loan? There is no right or wrong answer. It all depends on what makes sense for you and your finances.
If you’re confident you can manage the higher repayments, a short term loan could mean you’ll pay less interest in total. Choosing a shorter term also means you’re free from the responsibility sooner, which could help you focus on other goals in the future – like planning for your retirement.
However, if you’re more concerned about lower monthly loan repayments, a long-term loan could help.
Finding a loan term that suits you
At Evolution Money, we offer loan terms from 1 to 20 years. We’ll work with you to find a loan term that makes sense for you and your circumstances. Whether you’re looking for affordable repayments or you want to pay less interest, it’s our job to turn your financial goals into a reality.
Get in touch with our friendly advisors today and we’ll review your situation to find the best possible loan.
Think carefully before securing debts against your home 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.
