A long-term personal loan is a type of installment loan with an extended term, usually 60 months (5 years) or more. A longer-term can make a personal loan easier to afford and can help you avoid defaulting. However, a longer term can also mean paying more in interest over the life of the loan.
What is a Long-Term Personal Loan?
Here’s what you need to know about long-term personal loans:
When should you consider long-term personal loans?
There are a few circumstances when a long-term personal loan can make sense:
- You meet the lender's eligibility requirements: If you meet the lender's eligibility requirements, you’re more likely to qualify for a better interest rate. This can mean smaller monthly payments and a more affordable loan.
- You need a lower monthly payment: Long-term personal loans usually have lower monthly payments than short-term personal loans. This can make them more affordable, but it also means you'll be in debt for a longer period and may end up paying more in interest overall.
- You need to borrow a large amount: Borrowing a large amount of money can be difficult to afford, especially if you have other debts. A long-term personal loan can help spread the payments out over a longer period, allowing for more manageable monthly payments. Because of the term length, you may end up paying more in interest over time.
- You want to consolidate debt: If you have multiple debts with high interest rates, consolidating those debts into a single long-term personal loan could make the repayment process more convenient. The longer term can mean smaller payments that work better with your budget.
What are long-term personal loans best for?
Here are some common reasons to consider a long-term loan:
- Finance a large purchase: If you need to finance a major purchase, such as a home repair, a long-term personal loan can be a good option. The longer term can mean more manageable monthly payments than shorter-term loans.
- Consolidate debt: If you have high-interest debt, such as credit card debt, a personal loan can let you consolidate your debt into a single, fixed monthly payment. Depending on how much debt you have and your monthly budget, you may decide repaying it over a longer period makes sense, even if you end up paying more in interest over the life of the loan.
How to apply for a long-term personal loan
Applying for a long-term personal loan is similar to applying for any personal loan. You'll fill out an application, upload relevant documents and provide information about your finances, such as your income and debts. The lender will pull your credit report to assess whether you're eligible for the loan and decide on terms.
If approved, you'll sign a contract and agree to repay the loan in set monthly payments.
How long does it take to get a long-term personal loan?
The process typically involves an application and a credit check, and can take different amounts of time depending on the lender and whether you apply in-person, by phone or online.
Once you’re approved, you’ll receive funds by direct deposit or check. Funds are typically available soon after approval, but the amount of time can vary depending on the lender.
Long-term personal loans: the bottom line
A long-term personal loan can be a good option if you need to borrow a lot of money and require more time to repay. Keep in mind that because of the term length, longer-term loans can cost more in interest over the life of the loan.
Citi offers personal loans to both existing Citi customers and new Citi customers that meet specific eligibility criteria, including an established credit and income history along with additional factors determined by Citi. If you think you could benefit from a Citi Personal Loan, apply online today.
This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.
