Pros and cons of long term personal loans

Long-term personal loans can be an attractive option if you’re facing large expenses like medical bills or home repairs.  However, long-term loans can have drawbacks, too.

Here’s what you need to know if you’re deciding whether or not a long-term, unsecured personal loan is right for you.

What is a long-term loan?

As its name suggests, a long-term loan is one whose repayment period, or term, is fairly lengthy. Generally, long-term personal loans carry terms between 60 and 84 months, or five to seven years.

Benefits of long-term personal loans

Large loan amounts While short-term loans and credit cards may cap out at a few thousand dollars, long-term, unsecured personal loans are available at much higher amounts — up to as much as $100,000.

Flexibility

Unlike secured loans, which are tied to a physical piece of collateral or the need to be used for a specified purpose, unsecured personal loans can be taken out for a wide range of intended purposes.

Affordable monthly payments

Since long-term personal loans are paid off over many months, the monthly payments are often lower than they would be with a shorter-term loan.

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