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 installment loans usually range from 90 days to 72 months.
Sometimes these 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 score. 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 your interest rates will be higher if you have bad credit. The interest rate, or APR, is generally the most important factor when considering a personal loan. Still there are other considerations.
For instance, a loan that you repay for 72 months (six years) could result in more interest than a 12-month loan, even if the 72-month loan has a lower interest rate. There are several loan interest calculators available online to find out how much interest you will pay.
The 72-month loan could also have lower payments. Thus, the right payment plan will depend on your individual needs, but it’s important to understand every component of the loan.
$500 - $10,000
3 to 72 months
As low as 5.99%
CashUSA is a site that connects potential borrowers with potential lenders. They have loans available from $500 to $10,000. The site specifically says that the loans can be used for any purpose – whether it’s remodeling your home or taking a vacation.
There is no exact credit requirement, either. All credit types are accepted. All you need is to be 18 years old, a US citizen, and have at least $1,000 in income (after taxes). You should also have a checking account and a home or work number.
Meeting these requirements doesn’t guarantee you will be approved for a loan, though. Every lender has their own set of requirements, so it will be up to them whether they should offer you a loan.
Features and Benefits
- Flexible borrower requirements
- Loan request can be approved within minutes
- Money deposited as early as 1 business day
- All credit types accepted
$500 - $35,000
3 to 72 months
With such a wide variety of loans available, almost any project or need can be financed at PersonalLoans.com. In addition, there are no state regulations, meaning you could be eligible regardless of where you live.
Loan terms go from 90 days to 72 months, which is fairly standard for a personal loan. The same can be said for APR, which is 5.99% to 35.99%. If you are approved for a loan, you could have money available as soon as the next business day.
Features and Benefits
- Multiple loan types available
- Fast loan decision
- Funds deposited as soon as you accept an offer
- Nationwide availability
$500 - $5,000
3 to 60 months
As BadCreditLoans.com’s name implies, loans on this site are intended specifically for those with bad credit. As a result, the largest loan available is a bit smaller, with amounts going from $500 up to $5,000. It is typical for lenders to be hesitant to grant larger loans to those who have poor credit.
Nevertheless, this site has a process similar to that of the others. You must meet basic requirements such as being 18 years old and a US citizen. If you meet those requirements, you will see a list of potential lenders.
The positive aspect of applying with a site like this one is that your chances of ultimately being approved should be higher. Since the loans are smaller and the site is geared toward those with bad credit, lenders know what to expect from potential clientele. As per usual, though, it will be up to the individual lender whether or not you get approved.
Features and Benefits
- No obligation or fee 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
Best Long-Term Auto Installment Loans
Another type of loan that is usually repaid via installments are auto loans. We may not typically think of them as 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” in the event that 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.
Best 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 in order 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 over the life of the loan. 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 important to make payments every month (and not miss any) in order to naturally raise your credit score. The better your credit score, the better the loan will be the next time you need financing.