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The Pros and Cons of Taking Out a Long Term Loan

Long term loans are a very handy and great way of getting extra cash when you're in a difficult or tricky situation; however they do have some important conditions that you should look out for, especially in the small print. In this article, we will discuss the pros and cons of taking out a personal loan in the UK for people who have an excellent credit score, as well as people who have a bad credit rating. Remember to check out the FCA website for lender's credentials.

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Pros of Long Term Loans:

Quick fix

They can help you when you need a quick fix. If you urgently need cash today and know that you're in a good financial position and able to pay it off with the added interest, then a long term loan could be ideal for you. Make sure you search around to find the ideal one for you, there are often calculators available on the website for you to use.

Fast decisions

The decision is usually very fast and you should usually hear back from the lender within 24 hours, some even get back to you within minutes! This is especially handy as you don't spend time hanging around just waiting for one lender, you can apply to a different one quite quickly if you get denied. Those with bad credit should be cautious when doing this though as it could go on your file that you were rejected.


Long term loans can be used to help you with a number of things from holidays to shopping, the list is endless. You aren't tied down to use the loan for one item only such as a house or car. The flexibility that this offers is attractive to potential consumers.


You can offer apply for loans from lenders without much documentation. They normally take into consideration your situation with work and your credit history and can make a decision from that.

Cons of Long Term Loans:

High interest

Whilst lenders can offer you pre-approved loans and quick decisions, you should always pay attention to the interest repayment rate. This is especially true for applicants with bad credit history or a very low credit score. The repayment terms are more likely to cost you more and you may be able to get a portion of the money that you require, rather than the full amount.

Charges and Fees

Always make sure you read the terms and conditions. Yes they are long and fairly tedious but when it comes to early repayment charges, you don't want to be stung by something you didn't read or were aware about. If this is an option it is much better if you can just pay the required amount each month, instead of more money which results in paying the loan off early and ending up with stacks of fees. Long term loans are always better as they give you more time to pay off the remaining balance.

Defaulting on Payments

If you are unable to pay back the loan that you took out, then the lender is able to take you to court to reclaim their money by seizing assets. This will also include late payment fees among many other things, so we always recommend that you are only able to borrow what you can afford to pay back.

Bad Credit

If you are trying to get a loan with bad credit then you will probably be declined from a number of lenders. You are able to check your credit rating from a number of reputable websites including Clear Score and Equifax to name just a few. This is something important to consider when applying for a loan with bad credit as each denied application will put a mark against your credit rating.

So, above we have listed our top tips on the pros and cons of securing a long term loan. If you need any more information to help you with your search then have a look at the Money Advice Service who offer lots of articles and helpful tips. Remember to always think about high interest rates, bad credit scores and only ever borrow what you can realistically afford to pay back. Never apply for multiple loans at once without knowing your acceptance rate as you could end up with multiple loans and repayments. Think about what you need your loan for and if you could instead save up the money for it. All in all, we hope our tips have helped you in your search and feel free to take a look at some of our other helpful articles! What to look for in a lender or How to get a long term loan with a bad credit rating

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