- Longer repayment period means a smaller monthly payment. Are you looking to borrow a lot of money but pay it back in small amounts every month? If so, you want to get the longest term possible.
- Lower interest rate. Since you are paying the money back over an extended period of time, you can expect a lower rate – as long as you have a good credit score and history.
- Availability. As noted above, private lenders as well as banks and some credit unions offer these loans. This allows you to find the one that is perfect for you.
Potential DrawbacksWouldn’t it be nice if everything about long term personal loans was a benefit? Unfortunately, this is not how the lending industry works.
- Pay more in the long run. Since you are opting for a longer repayment period you end up paying more in interest.
- Better chance that something bad could happen to your finances during the repayment term. This could be anything from a job loss to a medical emergency. If your financial situation changes, you may not be able to make your payment. In turn, your collateral could be at risk (if it is a secured loan).
Kennebunk Savings is a mutual savings organization that was founded in 1871 in Kennebunk, Maine. and serves York County and Seacoast New Hampshire with 15 branch locations. Kennebunk Savings is a full service financial institution that offers personal and business banking products including deposit accounts, mortgages, home equity loans and...
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Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England (NBER Series on Long-Term Factors in Economic Development)
Book (Cambridge University Press)