Long term loans are loans that are paid off over five or more years. Spreading the cost over time makes the repayments lower and easier to afford.

If you need a loan with smaller repayments, then long term loans might be worth considering. But you should be aware that borrowing over a long time is more expensive overall because you end up paying more in interest.

If you want to apply for a long term loan, our comparison table above is a good place to start.

How do long term loans work?

Most personal loans are paid off gradually, over a short period of between one and five years. But long term loans are paid off over a much longer period of up to 10 years or more.

You should try to pay back a loan as quickly as you can. Long term loans should be avoided if you can afford a shorter loan. Check what you can afford with our loan calculator.

The advantages of taking out loans over 10 years or more include:

  • Larger loan amounts availablee: Banks will lend more money if you’re repaying it over a longer time period.

  • Competitive interest rates: This is how much you pay the bank for lending you the money.

  • Affordable monthly payments: If you spread your loan over a longer time period, it makes each monthly repayment lower.

  • Many lenders to choose from: Lots of banks offer long term loans.

There are also disadvantages to taking out a 10-year loan, or one that’s even longer. For example, long term loans have a higher borrowing cost – so the longer the loan period, the more you’ll pay in interest overall. It can also be harder to get approval for long term loans in the UK.

How to choose the best long term loan

There are three easy steps to follow when you’re about to apply for a long term loan.

  1. Work out how much you need to borrow

  2. Choose how long you need to pay it back

  3. Compare interest rates to find the cheapest option

The comparison table at the top of this page shows long term loans in the UK that can be paid back over four years or more. If you want to apply for a long term loan, the table gives you an easy way to compare rates before you choose one to apply for.

There are also a few other things to consider when looking at 10-year loans, or longer-term loans. These include:

  • Whether the loan’s secured or unsecured: Sometimes, long term loans are secured against your property. That means that if you don’t keep up repayments on your debt, the bank could sell your house to get its money back. It can be hard to find a long term unsecured loan if you’re borrowing for more than five years.

  • The type of interest rate: Most personal loans fix the rate of interest, but sometimes long term loans in the UK have variable rates. This means the rate can change during your loan, so check before you apply.

  • Whether you can repay it early: Long term loans can be paid back early but some lenders might charge an early repayment fee for doing this. You should check before you apply, as the option to pay it back early could save you money and help you clear your debts quicker.

  • The lender’s borrowing rules: Don’t forget to check the bank’s application guidelines before you apply.

What can I take out a long term loan for?

Most people who are interested in loans over 10 years or more are looking to finance long term projects or a big expense. That’s why so many people are interested in a £25,000 loan. A long term, large loan could be used for purchasing property, paying for a wedding or doing home improvements.

A long term personal loan shouldn’t be used for your business. You need a business loan for this.

Long term interest rates

When you take out a loan, there are two types of interest rates to look out for.

A fixed interest rate means the interest rate stays the same throughout your term, even if market interest rates change. This makes it easier to plan your repayments. You won’t have to pay any more if interest rates rise, but equally you won’t benefit from lower repayments if interest rates go down.

A variable interest rate means the lender can increase or decrease the interest rate while you are paying off your loan off. Your repayments would go up if market interest rates rose, but decrease if market interest rates went down. This can make it difficult to plan your finances.

Long term loans for bad credit

You can still get a loan if you have a bad credit history.

Choosing a long term loan shouldn’t affect whether you can get a loan. But long term loans for bad credit do have higher interest rates.

Long term loans for bad credit can be a good way to consolidate existing debts. You might find that this reduces your repayments and it can be easier to manage than paying lots of different lenders.