Best Long-Term Personal Loans in December 2024

Long-term personal loans offer flexible terms, competitive annual percentage rates (APRs), and minimal fees. Like other financing solutions, long-term loans can be used for a variety of purposes — like debt consolidation, home improvements, or covering major purchases. Terms can last for several years, which can make it easier to afford monthly payments when you need to take out a large loan.

Based on an analysis of 31 lenders, we chose LightStream as the best lender for long-term loans. LightStream offers repayment terms up to 20 years for home improvement loans, industry-low APRs for borrowers with exceptional credit, and a wide variety of loan purposes. Top long-term loan lenders also include SoFi, BHG, and Discover.

Best long-term personal loans

What are long-term loans and how do they work?

Long-term loans are often installment loans. Term lengths vary by lender but can range up to 20 years, depending on the loan type and purpose. Some loans, like mortgages, have longer terms.

There are two main types of long-term loans:

• Secured loans: Some long-term loans, like auto or home loans, are secured, meaning they require collateral in exchange for funds. Loan terms may be longer than unsecured loans. For example, a mortgage may have a 15- or 30-year term.
• Unsecured loans: Many long-term personal loans are unsecured and don't require collateral. However, lenders may have stricter income and credit score requirements. Borrowing amounts are often between $5,000 and $50,000, but some lenders offer $100,000 loans or more.

The loans discussed here are unsecured installment loans, also called personal loans. These loans do not typically require collateral. When you get a personal loan, you'll receive the full amount as an upfront lump-sum payment. You can use the funds for things like debt consolidation, home improvements, medical expenses, and big-ticket purchases.

Repayment terms

Long-term personal loans tend to have repayment terms of at least seven years or longer. The longest loan terms are commonly available for home improvements. LightStream, for instance, offers home improvement loans with 20 year repayment terms.

Once you borrow money, the balance will start accruing interest. Most long-term personal loans have a fixed monthly payment and fixed interest rate, so you'll always know what to expect when the payment comes due. Interest rates from long-term-loan lenders vary, but APRs from Credible lenders can range from 6.94% to 35.99%.

Example of a long-term personal loan

Here's a hypothetical example of a seven-year personal loan for excellent credit and what it would cost in total interest:

• Loan amount: $50,000
• Repayment term: 7 years
• Interest rate: 8.50%
• Monthly payment amount: $791.82
• Total interest charges: $16,513.24
• Total loan cost: $66,513.24

Long-term vs. short-term personal loans

Some lenders view long-term loans as riskier than other options since there's a higher chance of default. As a result, they may charge higher rates on long-term loans than on short-term loans. They also require good credit or better to qualify for the best rates and terms. However, both long-term personal loans and short-term loans generally have lower interest rates than credit cards.

Pros and cons of long-term personal loans

Be sure to weigh the benefits and drawbacks of long-term personal loans before applying.

Pros

• Longer repayment term: A longer term gives you more time to pay back what you owe, making these loans good for major expenses.
• Smaller monthly payments: Paying over a longer period of time typically lowers monthly payments and can make it easier to afford day-to-day expenses.
• Larger borrowing amounts: You can often borrow large sums — sometimes $100,000 or more.
• Versatile loan purposes: Funds may be used for debt consolidation, home repairs, medical bills, or emergencies.
• Fast funding: Unlike home equity loans, for instance, long-term personal loans can fund within days of applying. Some lenders can even deliver funds the same day.
• No collateral required: If using a long-term personal loan, you usually won't be required to pledge collateral for the loan like your house or a car.

Cons

• Higher APRs: According to Credible data, longer-term loans have higher APRs, which can make them much more expensive. This can offset risks of default the lender may face.
• More total interest charges: Longer terms and higher APRs means you'll be paying more relative to a loan with a shorter term.
• Strict requirements: Requirements can be stricter on long-term loans, especially if they're unsecured. For the highest loan amounts or best APR, you'll typically need good credit and steady income.
• Ongoing debt: A longer term means you'll have to keep making payments for longer. This could get in the way of plans to retire or take on additional financial commitments.

Methodology

Credible evaluated the best long-term personal loans out of 31 lenders based on length of available loan terms, minimum and maximum interest rates, types of approved loan purposes, customer experience, origination fees, discounts, availability of secured loans, and more.To assign star ratings, we used the following metrics and weightings:

• Rates and fees: 18%
• Loan terms: 18%
• Customer experience: 17%
• Eligibility: 14%
• Customer satisfaction: 10%
• Efficiency: 10%
• Options for poor credit and no credit: 9%
• Discounts: 4%

To select specifically for the best long-term personal loans, we chose the highest-rated lenders offering repayment terms between seven and 20 years. Lenders with lower rates and fees, broader loan amount and repayment term ranges, more perks and discounts, and greater nationwide availability ranked highest.

Credible's team of experts gathered information from each lender's website, customer service department, directly from our partners, and via email support. Each data point was verified by a third party to make sure it was accurate and up to date.

Learn more about how Credible rates lenders by exploring our Personal Loans Lender Rating Methodology.

How to compare long-term loan lenders

Comparing long-term loan lenders can help you get the best rates and terms, which can also save you money in the long run. When shopping around, consider the following:

• Loan amount: Long-term loans can range up to $100,000. Some lenders offer loans up to $200,000.
• Term: Make sure the lender offers the loan term you need for your intended loan purpose and amount. For example, LightStream offers 20-year repayment terms, but only for specific loan purposes, such as home improvement. Your loan must generally meet a minimum threshold amount to qualify for the lender's longest term as well. Longer terms mean lower monthly payments, but higher overall interest charges.
• Interest rate and APR: Usually expressed as a percentage, the interest rate is the cost of borrowing money. The APR accounts for the interest rate and upfront fees, such as an origination fee, that affect your monthly payment. The lower the rate, the less you'll pay each month and over time.
• Other fees: Some lenders charge other fees, such as late fees. Fewer fees generally means a more affordable loan.
• Loan purpose: Long-term personal loans can be used for an array of purposes, but some lenders restrict funds usage to certain things — like home improvements or major purchases.
• Eligibility criteria: Every lender is different, but you'll typically need to meet certain income, debt, and credit score requirements to qualify.
• Funding time: Some lenders offer same-day funding, while others take longer. Consider your options and needs.
• Reviews: The best long-term personal loan lenders are highly-rated on reputable sites like the Better Business Bureau and Trustpilot.
• Licensing: Check with your individual state's agency to ensure the lender is licensed to operate there.

What are the requirements for a long-term loan?

Every lender has its own qualification requirements, but here's what's generally required for a long-term personal loan.

Minimum credit score

Most lenders require good credit or better — a 670 FICO score or higher. The better your score, the lower the interest rate and the more favorable the terms could be.

Multiple factors affect your credit, including payment history, credit utilization ratio, credit mix, and average age of credit. Negative marks on your report — like a recent bankruptcy or debt in collections — lower your score.

Before applying for any type of financing, request a free copy of your credit report from a reputable site like AnnualCreditReport.com. Review your reports for errors; if you find any, dispute them with the reporting credit bureau immediately. Doing so could boost your score.

Sufficient income and employment

Lenders generally want to know you have a sufficient income — and stable employment — to cover your new loan payment and other expenses. The higher your income, the less risk you typically pose to the lender (as long as your debt is relatively low).

Income requirements depend on the lender. For example, Discover requires a minimum annual household income of $25,000. Be prepared to provide proof of income — such as recent bank statements, pay stubs, or W-2s — when applying for a loan.

Maximum debt-to-income ratio

Most long-term loan lenders also have a maximum debt-to-income ratio (DTI) requirement. DTI is the percentage of your monthly gross income that goes toward your debts. For example, if you earn $10,000 a month and spend $4,500 on debts — like a mortgage or car loan — your DTI is 45%. Generally, a lower DTI means higher approval odds. Many lenders prefer a DTI no higher than 36%.

Other requirements

Some lenders have additional requirements, depending on factors like the loan type, amount, and repayment term. For example, a secured loan requires collateral, which the lender can take if the borrower defaults on payments.

Specific documents may also be required, including:

• Proof of identity, such as a driver's license or Social Security number
• Income verification, such as W-2s, federal tax returns, pay stubs, or pension plan statements
• Proof of address, such as utility bills or a current rental lease or mortgage agreement
• Formal loan application

In some cases, a lender will request additional or supporting documentation before approving a loan.

How to apply for a long-term personal loan

Each lender's application process is different, but these are the typical steps to applying for a long-term personal loan:

• Gather documentation: Before starting the process, prepare your documentation. This may include getting a copy of your credit report (for personal reference) and gathering financial documents — like bank statements and pay stubs. You may need additional documents, but this will give you a head start.
• Compare lenders: Start shopping around for lenders. Check their online reputation, licensing status, requirements, terms, rates, and fees. Make a short list of your preferred options.
• Prequalify: Typically, you can prequalify for a loan online to get an estimate of your rate, terms, and loan amount. This process, which involves a soft credit inquiry, is quick and doesn't affect your credit. Compare quotes to narrow down your options.
• Run the numbers: Use an online calculator to get a better idea of your monthly payment based on factors like the estimated APR, loan term, and amount. You can also check the total interest payments over time.
• Formally apply: Complete your preferred lender's application process. This usually entails a hard credit check, so be prepared for a small, temporary drop in your credit score. Provide any additional documents upon request and wait for the lender's decision.
• Review the loan agreement: Once approved, look over the final loan paperwork. If everything's in order, accept the offer and receive the funds.