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Pros and Cons of Long Term Loans

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Long term loans are essentially personal loans that you can borrow over a relatively longer term – usually over 2 years. You can borrow a considerable amount of money through a long-term loan. Long term loans facilitate big-ticket ventures, making monthly instalments affordable and convenient.

In this article, we’ll shed light on the pros and cons of long-term loans and how to find good long-term loan offers online.

What are long term loans?

Long terms are secured and unsecured loans that you can pay off over a period of 5 years or more. With a long term personal loan, you can spread the cost of your purchase over an extended-term and pay it off in affordable monthly payments.

You may consider a long term loan if you want to pay smaller monthly payments. However, it is important to understand that long term loans may cost you more in the long run. You have to pay an interest on the loan throughout the entire term, along with the monthly instalments.

You may end up paying more in interest for a 10 year loan, than a 5 year loan. So, even if you get a loan offer with a low interest, you may end up paying more if the term is too long. Therefore, a long term loan may prove to be more expensive overall.

When to consider long term personal loans?

Long term personal loans may be a better option for those who need payment flexibility and smaller, more affordable instalments while repaying their loan. This type of a loan would suit people with a variable or commission-based income since it provides the borrower with convenience.

If you choose a longer term, you’ll have the option of paying lower monthly payments. Some lenders do not impose early repayments charges. Such lenders provide you the flexibility of paying an extra sum every now and then, without incurring any additional costs.

However, it is important to keep the interest implications associated with long term loans in mind. A longer term may accrue you a greater interest. So, weigh the pros and cons and assess if the loan’s terms align with your financial circumstances.

How to find the best long term loans (UK)?

Here are some things that you should consider while finding a suitable long term loan for yourself:

  • What amount do you need to borrow?
  • How long will you take to repay?
  • Have you explored the market for loan offers?

Assess your income and expenses to work out a suitable loan amount. Ideally, you should be certain about your affordability and repayment capability before borrowing money. It is also important to make a blueprint of your repayment strategy. Does your monthly budget have room for repayments? Do you have a contingency plan for the loan’s repayments? Ensure that you plan your loan accordingly.

Once you’ve planned your loan, the next step is to explore the loan market for suitable offers. Oyster Loans is an FCA-approved loan broker in the UK. Compare personalized loan offers from multiple lenders at the click of a button.

Here’s how to successfully apply for the best long term loans:

  • Choose a suitable loan type: Figure out what kind of loan works best for you. Your long term loan can be secured against an asset, such as your home, or be an unsecured loan without collateral security. Borrowers with a low credit score may have a better chance of getting a secured long-term loan. If you have a stellar credit history, your chances of qualifying for an unsecured loan with competitive interest rates are high.
  • Check the type of interest rate: Check the type of interest on your loan. Fixed interest rate stays the same throughout the term of the loan. On the contrary, variable interest rate is subject to change as per market fluctuations. So, if the market rate rises, you may have to pay a higher interest rate during this period.
  • File your application carefully: Supply accurate information to the lender. Fill the application form meticulously.
  • Check for additional charges: Thoroughly go through your contract to check for additional charges. In case of long term loans, it is usually better to opt for an offer without early repayment charges. This will give you greater payment flexibility.

Pros and cons of a long term unsecured loan

Here are some pros and cons of long term loans that you should take into account to make an informed decision:


  • Small and affordable monthly payments
  • It is easier to juggle long term loan payments with other debts, household expenses and bills.
  • Depending on your credit history and financial circumstances, you may be able to borrow a significant loan amount.


  • Long term loans accrue you more interest rate due to the length of the loan term.
  • To avail an unsecured long term loan, you should have a stellar credit history.
  • Not a lot of lenders offer long-term unsecured loan, so finding such a lender may be difficult.
  • Your lender may impose an early repayment penalty. So, it is important to check your contract for additional costs.


A long-term loan requires commitment and patience. It is crucial to know what you’re getting into is crucial before signing the agreement. Be it debt consolidation, financing a renovation project, or paying medical bills, you can use a long-term loan at your discretion. However, it is vital to pre-plan your repayments to avoid the possibility of a default. As long as you use the credit responsibly, it’ll help you boost your credit rating.