Best Long-Term Personal Loans

The higher the price climbs, the scarier it gets — unless you can break up the expense into manageable monthly payments spread over many years. Whether you’re planning for a home renovation, vehicle purchase, medical procedure, or something else with too many zeros at the end of the price, a long-term personal loan could mean the difference between straining your budget and comfortable repayment.

But not everyone will qualify for a long-term personal loan, and you should be aware of the downsides when compared to short-term loans. Here’s how to compare your options and apply with the best long-term loan lenders.

Best long-term personal loan lenders

The following lenders offer personal loans with maximum repayment terms of at least six years. Depending on the lender and the purpose of the loan, terms can last up to seven, 10, 12, or 20 years. Other lenders offering long-term personal loans include Wells Fargo (up to seven years) and Navy Federal Credit Union (up to 15 years for home improvement loans).

What are long-term loans?

A long-term loan is like any other type of loan, just with a longer repayment term. Long-term installment loans typically provide a lump sum of money that you repay monthly; with a revolving credit line, you can draw as needed up to your limit. Types of long-term loans include mortgages, home equity loans, home equity lines of credit (HELOCs), and some personal loans.

There aren't any universal criteria for what separates a short-term loan from a long-term loan. However, since five-year maximums are common for many personal loan lenders, a loan with a repayment term longer than five years can be considered long-term. 

When comparing personal loans, you may have multiple repayment term options. Personal loan repayment terms typically range from two to seven years, but some personal loan lenders offer even longer repayment terms. For example, LightStream offers home improvement loans with repayment terms up to 20 years, and BHG Financial offers personal loans with repayment terms up to 10 years. 

What are long-term loans typically used for?

In most cases, the appeal of a long-term loan is the lower monthly payment. Borrowers may be drawn to long-term loans when they need help paying for a costly expense, since the longer repayment term helps with budgeting. For example, you might use a long-term personal loan for:

• Home remodeling
• Boat or auto purchase
• Timeshare purchase
• IVF or family planning
• Medical expenses
• Debt consolidation

Pros and cons of long-term personal loans

Compared with short-term personal loans, long-term personal loans have benefits and drawbacks.

Pros

• Lower monthly payments: Long-term personal loans typically have lower monthly payments than short-term personal loans, which puts less strain on your monthly budget. 
• Larger loan amounts: You may be able to borrow $100,000 or more with a long-term loan, depending on the lender and other factors. 
• Prepayment flexibility: Most personal loan lenders don’t charge a prepayment penalty, so you always have the option to make extra payments or repay the loan early without incurring additional fees. This strategy can help you reduce interest costs. 
• Can help you manage large expenses: A long-term personal loan may help you pay for a large expense, such as a home renovation, that would be unaffordable under other circumstances. 

Cons

• May have higher interest rates: Longer repayment terms mean more risk for lenders, which often means higher interest rates. A higher interest rate and a longer repayment term increase your borrowing costs over the life of the loan.
• Stricter eligibility criteria: Just as long-term loans are riskier for the borrower, they’re riskier for the lender. Lenders typically like to see higher credit scores when extending credit for a longer period of time. “If you have a lower credit score, you may only be offered short-term loans,” says Justin Moran, Founder and CEO at Payoff Genius, a financial education tool. 
• Could affect your ability to qualify for future loans: Lenders consider the current debt you have when deciding whether to approve you for a new loan. A long-term loan creates a debt obligation for years (unless you pay it off early), which could potentially limit your borrowing options during that time.  

When to consider a long-term personal loan (and when to avoid it)

A long-term personal loan can be a lifeline under certain circumstances, but it’s not the right choice for every financial situation. Here’s how to decide if a long-term personal loan is right for you. 

When to consider

• The loan is part of a strategic plan to consolidate debt: Though long-term personal loans cost more overall than short-term loans, paying off debt with a fixed-rate personal loan can still save you a significant sum when compared to carrying a balance on a high-rate credit card. You can use a personal loan calculator to estimate your savings. 
• The expense is unavoidable and unaffordable: It might not be possible to pay for a necessary medical procedure or auto repair from your savings. If a short-term loan would cause you to fall behind on payments, a long-term loan might be the safer option. “It is imperative that the payment be made on time and in full every month. That means setting aside that much cash and preferably setting up autopay to ensure timely payment,” says Michael Sullivan, Director of Education at Take Charge America. 
• The loan still has a low APR: “Go longer unless they make it worth your while. If you’re looking at two personal loans that have different terms, say three vs. five years, but they have the same or similar interest rates, I would always pick the longer one,” says Moran. “You can always pay it off faster if you want but enjoy the flexibility and lower payment when you need it.”

When to avoid

• You’re prone to impulse spending beyond your means: If you lack discipline with spending, credit card debt consolidation may not be the best solution to the problem. “Continuing to run up debt after consolidating is a path to financial disaster,” says Sullivan. “Consumers who have a spending problem should contact a nonprofit credit counselor instead of borrowing more money.”
• You’re nearing retirement or facing an income loss: Before taking out a long-term personal loan, consider your plans for the duration of the loan term. Will you be retiring or sending a child to college before the loan is fully repaid? Consider any changes to your budget that could increase the risk of default. 
• The expense is non-essential: Although a wedding or a dream vacation can have great sentimental value, its practical value is another story. Avoid taking on long-term debt to pay for an event or experience you'll get to enjoy just once. 

Long-term vs short-term personal loans

The table below shows how the repayment term can affect the monthly payment and total repayment cost for a hypothetical $20,000 personal loan with an 18% interest rate. Note that the longer repayment terms result in a lower monthly payment but higher total interest costs over the life of the loan.

However, keep in mind that you're unlikely to get the same interest rate on a longer-term loan. The interest rate would likely increase with the length of the repayment term, meaning that the overall interest costs in the hypothetical example above could be significantly higher. Consider the average prequalified rates on 3-year and 5-year personal loans for borrowers using the Credible marketplace:

• 3-year loans: Typically around 13%
• 5-year loans: Typically around 19%

How to choose the right term length

If there’s little difference in APR between two loan options, choose the longest term. Then, determine an amount you can comfortably afford to dedicate to debt repayment each month, and repay the loan at a faster pace. 

Use this same strategy even if there’s a slight difference in the APR, says Moran. “For example, if the offer is 9.85% on a 3-year loan but 10% on a 5-year, I would take the 5-year. You can always pay it off faster if you want but enjoy the flexibility and lower payment when you need it.”

Choosing the right term length becomes more complicated if there are major differences in rates and fees. You should err on the side of flexibility, but aim for the term option with the lowest total repayment cost that still has a monthly payment you can comfortably afford. 

What are the requirements for a long-term personal loan?

Each lender has its own requirements, but here’s what you can generally expect when applying for a long-term personal loan. 

Minimum credit score

There’s no universal minimum credit score for a personal loan, but many personal loan lenders look for a FICO score in the mid-600s or higher. Lenders check your credit report to see how well you’ve managed your debt obligations in the past. Some lenders consider borrowers with fair credit or even bad credit, but it may be a challenge to qualify for longer repayment terms, and the lowest rates are typically reserved for excellent credit borrowers. 

Short-term personal loans may be easier to qualify for than long-term personal loans for borrowers with bad credit, but short-term personal loans should not be confused with short-term, high-cost loans from predatory lenders, such as payday loans, title loans, and other high-risk loans. 

Sufficient income and employment

You’ll typically need a source of income to qualify for a personal loan, and some lenders have minimum income requirements. Also, lenders may have different requirements regarding what counts as income. You may need to upload documents like W-2s or tax returns from previous years to demonstrate stable earnings. 

Maximum debt-to-income ratio

Lenders typically evaluate your debt-to-income ratio (DTI) to determine if you can manage more debt based on your income. You can calculate your DTI by dividing your total minimum monthly debt payments by your gross monthly income. Lenders tend to prefer a DTI below 36% for personal loans — anything higher is cause for concern that you might struggle to repay another loan. 

Moran says some lenders are willing to be more flexible with debt consolidation loans, since you’re using the loan funds to reduce your existing debt. “Some lenders are willing to offer a longer term or more cash if you are willing to provide some extra info or allow the lender to pay off your debts directly,” says Moran. “There might be more options that just aren’t shown online. Try talking to the lender directly and see what they might be able to offer.”

Other requirements

Some lenders have specific requirements for personal loan repayment terms of a certain length, often related to loan amount or loan purpose. For example, Navy Federal Credit Union offers its longest terms for home improvement loans but has high minimum loan requirements:

• A $25,000 minimum loan amount for terms of 61 to 84 months
• A $30,000 minimum loan amount for terms of  85 to 180 months
• Applying with a co-applicant for loans of more than $50,000

How to compare long-term loan lenders

When comparing long-term loan options, consider the following features:

• APR: The APR (annual percentage rate) is the annual cost of the loan expressed as a percentage of the loan amount. It includes both the interest rate and any upfront fees. 
• Total repayment cost: Long-term loans offer lower monthly payments, but it can be easy to ignore the total cost of repayment over the life of the loan. Use a loan calculator to compare total interest costs between different loan terms.
• Funding time: If your expense is urgent, check how long it will take for the lender to disburse the loan funds. While funding a personal loan typically takes 1-3 business days, some lenders offer same-day personal loans. 
• Loan restrictions and minimums: Pay attention to any restrictions on loan use or minimum borrowing amounts the lender requires for long-term loans.
• Lender reputation and customer support: You’ll be working with the lender for many years, so make sure it offers customer support options that meet your needs (such as live chat or phone support during convenient hours) and check customer reviews on Trustpilot for any red flags. 
• Loan management tools: Evaluate the lender’s loan management tools, especially if your plan is to make extra payments. For example, does the lender have a mobile app that makes it easy to put extra cash toward the principal whenever you see fit, or will you need to send a check? The repayment experience may impact how quickly you repay the loan. Also, check whether the lender offers autopay and whether you can earn a discount for enrolling. 

How do long-term loans impact your credit?

Applying for a personal loan will cause a slight dip in your credit score, and adding to your outstanding debt may also negatively impact your score. So, you might see your credit score decline at the beginning of your long-term loan repayment period, when your outstanding balance is high relative to the loan amount. 

But your payment history is the most important factor in calculating your FICO score, and late or missed payments can cause significant damage. So, if you’re worried about your credit score, choose a personal loan repayment term with a monthly payment you can confidently afford. 

For someone with a thin credit history, a longer-term loan may actually be beneficial. “The longer-term loan has more opportunities for on-time payments and may actually slightly help a consumer with few debts,” says Sullivan.

Methodology

Credible evaluated 32 lenders across 1,216 data points to find the best long-term personal loans 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. Lender star ratings were established based on the following weighted categories:

• Rates and fees: 18.75%
• Eligibility and options for bad and no credit: 17.5%
• Availability: 12.5%
• Loan amounts and terms: 10%
• Customer satisfaction: 10%
• Customer service: 10%
• Efficiency and fund delivery: 10%
• Discounts: 7.5%
• Credible proprietary data: 3.75%

Credible's team of experts gathered information from each lender's website and from our partners directly. We also considered each of our partner lenders' statistics over a 12-month period — including average funding times, average credit scores for approved applicants, and average rates. Each data point is verified by a senior editor to make sure it's accurate at the time of publication.

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