Personal loans can be useful if you need financing for a large amount of money, such as a wedding, funeral, home improvement, car repair, debt settlement etc. One of the most important things to consider when choosing a personal loan it’s payback time. How long you have to repay the loan affects your monthly payments, interest and other factors. So if you’re having trouble deciding how long you should go, here are some helpful tips to keep in mind.
How long is the maximum loan repayment period?
The loan repayment period is usually two to five years. Any loan that requires repayment outside of this category can be considered a short-term or long-term loan, although there is no clear definition.
Monthly payments – why it’s so low
When you choose a personal loan with a short repayment period, you will pay off the loan quickly and you will not be hanging over your head for longer than you want. . But this comes at the cost of higher monthly payments compared to a loan that takes longer to repay. This is because personal loans are a must have Repayment in fixed amounts, equal months.
Being active in paying down your debt can affect how much credit you have left monthly budget for other expenses. This is the choice of a long-term loan that can alleviate some of those financial problems. Choosing a long-term loan usually means lower monthly payments, since you have more time to pay off the balance.
Select accumulate some personal loans for a long time. A lease repayment term of up to 144 months (12 years) was offered to lenders through Understanding. LightStream borrowers can also apply for $5,000 and $100,000. But if you do not need to borrow about $5,000 and need a loan to finance small loans, Improved a solid choice. The lender offers a repayment term of 84 months (seven years).
LightStream Personal Loans
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Annual Percentage Rate (APR)
5.99% to 21.49%* when you sign up for autopay
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Loan purpose
Debt settlement, home improvement, car financing, medical financing, wedding and more
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Amount of loan
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Condition
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Credit required
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Initial payment
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Early payment penalty
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Late payment
Personal Loan Consolidation
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Annual Percentage Rate (APR)
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Loan purpose
Debt settlement / refinancing, home improvement, bulk sales
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Amount of loan
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Condition
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Credit required
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Initial payment
2.9% to 8%, minus loan proceeds
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Early payment penalty
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Late payment
Up to $10 (with 15 day warranty)
Interest payments – remove the Band-Aid
The downside to choosing a long-term personal loan is paying interest over the life of the loan. Since then lenders pay interest each month, the longer the loan term the more interest.
Taking out a personal loan in the short term will help you save on interest (in exchange for more monthly payments, of course). But if a longer term with more interest is more appropriate for your financial situation, there are a few things you can do to make sure you’re paying as little interest as possible.
First, before you apply for a personal loan be sure of yourself improve your credit score if it is less than good. Lenders evaluate your credit when you are approved for a loan and set the interest rate you will pay. The higher your credit score, the lower your interest rate, which means you’ll spend less on interest. payments over the life of the loan.
It’s also a good idea to double check if your lender offers a discounted APR for making your monthly payments. car rental. As the name suggests, autopay automatically pays your monthly bill from an account you choose, ensuring you never miss a payment. SoFi and Understanding only a few lenders offer a 0.25% APR discount for using autopay.
SoFi Personal Loan
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Annual Percentage Rate (APR)
7.99% to 23.43% when you sign up for autopay
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Loan purpose
Debt settlement/financing, home improvement, rehabilitation assistance or medical expenses
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Amount of loan
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Condition
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Credit required
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Initial payment
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Early payment penalty
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Late payment
Other ideas
If choosing a long-term loan is financially feasible for your monthly budget despite the interest that accrues over time, avoid lenders who pay that fee. first sentence. Choosing a lender that doesn’t charge these fees means you can make additional payments on your balance without penalty, saving you interest over time. Choose to cover a few loans no early payment penalty.
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bottom line
Before taking on any type of new debt, including a personal loan, you’ll want to consider how the monthly payments fit into your budget. With a short-term personal loan, the monthly payments are usually higher; with a long-term personal loan, the monthly payment may be lower, which can further stretch the budget. On the flip side, this could mean you’re paying more interest over the life of the loan.
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Regulatory Information: The opinions, analyses, assessments or recommendations expressed in this article are solely those of the Select Editor staff, and have not been reviewed, endorsed. or verified by a third party.