There are some purchases which, for most of us, require borrowing over a long period of time. The most common example of this is the loan on your home (if you have one). Though we typically refer to them as “mortgages,” these are, in fact, one kind of long-term loan.
Whether it’s financing a home, a car, or starting a business, you will be stuck without the necessary funds in place. But you may think your options are limited if you have bad credit. While that may be somewhat true, there are still several lenders willing to help those with less than stellar credit history.
The key is knowing where to find such lenders. That’s what we will cover in this article.
Best Long-Term Personal Installment Loans
Installment loans work differently from other types of loans, such as payday loans. Whereas payday loans are paid in a lump sum, installment loans are paid in monthly payments. This feature is what allows them to be repaid over a much longer period of time. Repayment periods on personal loans usually range from 90 days to 72 months.
Sometimes these personal loans are for small amounts of $500, but they can go up to $35,000 with some lenders. The actual amount available to you will be largely dependent upon your credit scores. This can be mitigated somewhat by secured loans (where you provide collateral). However, most installment loans are unsecured loans.
Because these installment loans are usually unsecured, that inevitably means you will have higher interest rates if you have bad credit. The interest rate, or APR, is generally the most important factor when considering a personal loan.
However, interest rates may still be lower than your credit cards. Many people use these loans for debt consolidation to pay off credit card debt and other high-interest debt.
Features & Benefits
- Flexible borrower requirements
- Loan request can be approved within minutes
- Money deposited as early as 1 business day
- All credit types accepted
CashUSA connects borrowers with lenders. Each application is sent to the lender most likely to lend to the borrower. Because it works with a variety of credit profiles, it is not only a poor credit loan broker.
Interest rates vary depending on the lender, so make sure you read through the terms for each emergency loan before you choose. Applying online only takes a few minutes, and funds are often available the next day.
Loan Amount$1,000 – $35,000
Loan Term3 to 72 months
Features & Benefits
- Multiple loan types available
- Fast loan decision
- Funds deposited as soon as you accept an offer
- Nationwide availability
You can get a loan through PersonalLoans.com with credit scores as low as 600. Each lender in their network offers its own unique interest rates.
The quick and easy online application only takes minutes. You’ll have a decision within a business day of submission.
Loan Amount$500 – $10,000
Loan Term3 – 60 months
APR5.99% – 35.99%
Features & Benefits
- No cost to check loan approval
- High approval rate despite credit history
- Funds available as soon as next business day
- Assisting people with bad credit since 1998
Bad Credit Loans is an online lender marketplace that allows you to connect with multiple lenders by filling out a single application. The service is 100% free.
Once you’re approved, your lender will provide you with the APR, loan fees, and other terms. Read through the terms, compare all the offers you’ve received, and only accept the loan you’re most comfortable with. You are not obligated to accept the personal loan from any lenders that you are matched with.
Long-Term Auto Installment Loans
Another type of loan that is usually repaid via installments are auto loans. We may not typically consider them to be such, but an installment loan is generally any loan that is repaid in monthly payments.
An auto loan is also a secured loan, meaning the automobile can be “recovered” if you are no longer able—or decide not to—make your payments any longer. Although this aspect of auto loans means they are slightly lower-risk, it doesn’t guarantee you will automatically be granted the best possible rate.
Currently, the average auto loan has a 4.21% interest rate, paid over 60 months. If you have bad credit, that rate will likely be higher. It will also generally be higher on a used car than on a new car. Whatever the case may be, always shop around and compare rates. Even a one-percent difference in the interest rate can make a huge difference over 60 months.
Long-Term Home Installment Loans
While the wealthiest of the wealthy may be able to purchase homes with cash, most of us need a mortgage to make such purchases possible. The good news is that mortgage rates are low right now, so financing a home is relatively affordable.
It’s almost difficult to fathom now, but mortgage rates peaked at over 18% in the 1980s. Today, rates are under 4%. Given that rates are already quite low, you might think that a half percent doesn’t really matter, and you should worry about other aspects of the mortgage.
But the truth is that such a small margin can, in fact, make a difference. Sure, it may not be huge, but it could still be noticeable.
For example, consider a 30-year fixed-rate mortgage on a home valued at $310,000. You put 20% down to bring the mortgage principal to $248,000. With a 3.5% interest rate, you would pay about $502,907.10 over the life of the loan. But with a 4% interest rate? That amount jumps to $528,236,38—a difference of $25,329,28. Certainly, that is nothing to sneeze at.
A Loan for the Long Haul
When searching for a long-term installment loan, it is always important to pay close attention to the numbers. Because the time horizon on these loans is so great, seemingly small differences in the loan terms can make a huge difference overall.
For instance, a 1% difference (or even one-half percent) could end up costing you thousands of dollars. The same is true for the repayment period. Although 72 months can seem attractive due to lower payments, you could end up paying quite a bit more overall due to paying interest for an extra year.
The best thing you can do is use one of our many loan networks to find the best rate possible. Meanwhile, it’s critical to make payments every month (and not miss any) to naturally raise your credit score. The better your credit score, the better the loan will be the next time you need financing.