Best Long Term Personal Loans With Affordable Monthly Payments

Discover the best long-term loans with affordable monthly repayments.

Updated: June 13, 2024
Matt Crabtree

Written By

Matt Crabtree

CompareBanks is reader-supported. When you click through some links on our site, we may earn an affiliate commission. Learn more

Are you looking for ways to handle debt consolidation, pay for home reformations or purchase a home with a loan amount that doesn't demand unaffordable monthly payments?

A long-term loan is one answer that has many advantages. Whether you need to increase your credit score or pay for business-related purchases, selecting this loan type can benefit your circumstances.

Selecting a loan with a long term can be difficult. It's worth knowing as much as possible about these loans before committing to a lender. However, we've done the difficult work for you.

In today's article, we’ll have a look at long-term loans, how they work, their main features, and the seven best long-term loans for UK borrowers, which we reviewed first-hand. Let's start by defining what a long-term loan is.

ProviderScoreDetails
1. Pepper Money★★★★★Click Here
2. United Trust Bank★★★★★Click Here
3. Selina Finance★★★★★Click Here
4. Tesco Bank★★★★Click Here
5. ASDA money★★★★Click Here
6. Together★★★★Click Here
7. Evolution Money★★★★Click Here

What Are Long Term Loans and How Do They Work?

If you're looking for a long-term loan, you might have seen that these options are loan agreements that extend over a long timeframe.

You'll have seen that many of these loan types have longer terms than 12 months. To be specific, they can span over several decades. In many situations, they also have lower interest rates if you compare them to short-term loans.

Typically, these loans work by giving you between a two and seven-year term. This loan term is the period you'll have to repay the amount you borrow.

What Are the Types and Features of Long-Term Loans?

There are several types and features of loans with long terms.

Consider these features and consider them when comparing several providers and financial institutions.

  • Low interest rates — As mentioned, when we compare this loan type to short-term loans, it's clear they have lower interest rates. The low interest rate refers to how much money you'll need to spend to cover the cost of borrowing.
  • Long loan term — The loan term refers to the length of time you spend making monthly payments to the lender to repay the loan.
  • Eligibility criteria — Credit history and income are a couple of eligibility criteria your lender may consider when you apply for a long-term loan. They will check your credit history or credit report and require you to provide evidence of your income — such as three payslips.
  • Secured loan — A secured loan is one loan type for which you must provide collateral. The collateral ensures your lender takes less risk when lending you funds and can take the collateral if you fail to make the repayments.
  • Personal loans — A personal loan is a sum of money you borrow for various reasons — from debt consolidation to home renovations to wedding costs. These loans types can either be secured or unsecured. 
  • Unsecured loans – An unsecured loan won't demand that you put forward collateral. You'll be able to borrow money without giving up any nominated assets. If you don't repay the loan, a few things can happen. Your interest rate will increase. Your credit score will drop. You'll have to pay fees, and the lender may summon you to a county court judgment.

What Are the Pros and Cons of Long-Term Loans?

Long-term loans are beneficial in many ways, but they also have drawbacks.

Check out the pros and cons when taking out a long-term loan.

Pros

✔️ Lower monthly repayments — You'll not need to worry about costly repayments each month. You will have lower monthly repayments because the loan term is longer.

✔️ Lower interest rate — With low interest rates compared with short term loans, you'll face fewer in terms of monthly costs when repaying the loan.

✔️ Credit scores may increase — If you can borrow money responsibly and prove you can repay your loan with the long term, your credit score may improve. This will give you access to better loan conditions in the future.

Cons

❌️ Default penalties — You'll receive default penalties and a damaged credit rating if you cannot keep up with the repayments. If you have a secured loan, the lender may seize the asset if you cannot repay it.

❌️ Greater sums to repay overall — The overall cost of repaying your loan over the long term is high. This high cost is due to the longer time interest can build up. Although your monthly interest rate is low, the overall cost is high.

❌️ Early repayment fee — You may face an early repayment fee for repaying the loan early. This fee can vary and will largely depend on the type of loan, but if it's a mortgage, your lender can charge you between 1% and 5% of the outstanding balance.

Best Long-Term Loans for UK Borrowers: Reviews

Our first-hand reviews of these nine best long-term loans are just below.

Here are our findings for these top providers and the main features you need to know.

1. Pepper Money

Pepper Money is a global financial institution that offers a range of loans with long terms to UK residents. This provider offers homeowner loans up to a maximum of £1m.

The loans Pepper Money offers are secured loans. The collateral you will put forward is your home.

The minimum amount available for you to borrow is £5,000. Pepper Money will allow you to choose between a three and 30-year loan term. We found their loan calculator useful, informing us how much we would pay each month.

Simply enter your property value, mortgage balance, the purpose of the loan, the amount you need to borrow, the product type you're looking for and a few other details to receive your potential monthly payments.

As part of their reviews, customers state that despite a poor credit history, they would recommend Pepper Money for the fast application process. The lender base rate for Pepper Money's loans is 5.20%.

2. United Trust Bank

United Trust Bank offers structured property finance loans for a long term. We learned that the highest amount borrowers can request is £1m and that the loan type is a secured loan. With United Trust Bank, you can put forward commercial, multi-unit residential and mixed-use properties or land, hotels, offices and more as collateral.

We found that the maximum term is five years and that the rates and fees can be negotiated per-proposal. You can get rolled-up interest or serviced interest with these loans.

The structured property finance loan is ideal for UK residents and off-shore borrowers. This loan is right for you if you are a property investor, developer, or individual with a high net worth. It's an alternative option if your traditional funding does not serve your needs. 

3. Selina Finance

Selina Finance offers homeowner loans that are secured against your property. We discovered that the homeowner loan term lasts between five and 30 years and that customers can receive between £10,000 and £1m.

In their representative example, Selina Finance states that if you borrow £100,000 over a 25-year loan term and have a variable rate of 9.00%, you'll pay £872.72 each month.

Additional costs include the £3,000 arrangement fee and the £995 product fee, and the portion of interest included in the overall cost would be £16,1816.00.

This provider also has a representative example of fixed-rate interest. If you borrow £100,000 over a 15-year loan term with a fixed interest rate of 8.45%, you'll pay £833.89 monthly.

We were able to check our eligibility for this loan type within minutes, and the application process took approximately 10 minutes. We noticed that early repayment fees apply when repaying this lender's loans early, but this provider offers smooth service and supportive financial experts.

4. Tesco Bank

Tesco Bank offers long-term loans over a 10-year loan, one of the longer-term loans available. It means that even though you may pay more interest, you can make regular, affordable payments spread over a longer period and gain additional advantages.

For instance, if you have a Clubcard, you may receive a better rate for these loans.

We discovered that this provider offers loan amounts between £10,000 and £25,000. When we used their loan calculator, we found that without a Clubcard, if you want to borrow £7,500 over five years, you can expect to make monthly payments of £145.43 with an annual percentage rate of 6.3%, which takes the total repayable amount to £8,735.80.

In their representative example, Tesco Bank states that with a 7.2% annual percentage rate, if you borrow £10,000 over a loan term of eight years, your loan repayments will be £136.30. The total cost will be £13,075.20.

Our financial experts noted that Tesco Bank offers unsecured personal loans and that the loan term can span 12 to 20 months.

5. ASDA money

With ASDA money, borrowers can receive personal loans between £1,000 and £25,000. They offer loan terms of between one and seven years with fixed monthly payments, as stated in your loan agreement.

We found that using their eligibility criteria did not affect our credit score. Our application enabled us to boost our credit score, gain access to funds quickly, and repay the funds with a flexible arrangement.

ASDA offers unsecured loans only, meaning you won't need to put down any collateral when borrowing.

They work alongside Aro to provide you with tailored options that work for you. The eligibility check requires you to enter a few details, such as what you'll use the money for, the amount you need to borrow, the loan term, and your personal information.

Your lender will determine the interest rate, which will be greater if you choose a longer loan term instead of a short-term loan.

6. Together

Together, it offers unsecured loans and secured loans. They will look at your circumstances when you apply instead of just reviewing your credit profile. With the secured loans, your property can be reposessed if you cannot keep up with the monthly payments.

We noticed that getting your secured loan with Together can take weeks. Some cases may even take a bit longer. When you apply for the loan, you'll need to provide payslips and tax returns or your company structure form if you are applying as a company.

Together also offers debt consolidation loans with loan terms from three to 30 years. This loan type will help you pay off personal loans or credit card debt, and you'll then have to repay the loan amount with one monthly repayment each month.

Their fixed rate annual percentage rate starts at 9.60% each month for debt consolidation loans, while their variable rates start at 10.65% yearly. 

7. Evolution Money

With Evolution Money, you can get a maximum loan of £100,000. The term extends to 20 years, and we found that even with a previously bad credit score, this provider aims to support its customers. Evolution Money will consider your financial circumstances and look beyond your credit report.

Your loan is ideal if you need to complete home improvements, take out funds for a wedding, purchase personal items with car finance, or book a holiday.

The lowest amount you can borrow from Evolution money is £5,000, but remember that this depends on your eligibility. We found that our access to funds happened in just a few days. However, we noticed that this can vary depending on how quickly you can provide all the required documents.

In terms of interest rates, this loan requires a variable rate. It can range from 11.7% to 46.5%. In their typical example, if you borrow £20950.00 over an 85-month loan term and have an interest rate of 23%, your monthly payments will be £537.44, and the total amount payable would be £45,682.15. It includes a product fee amounting to £2,095.000 and a lending fee of £714.00.

Best Long-Term Loans for UK Borrowers: The Verdict

Long-term loans can help you consolidate debt or make home improvements, and although choosing a lender can be difficult, it's essential to check the interest rate they offer. Making a comparison between each lender can help you discover which option best matches your financial situation.

It's also worth looking at the loan term. With longer-term loans, you face higher interest rates overall but more affordable monthly repayments.

Some options that meet this criteria are Tesco Bank and Together, but look carefully at each lender to find the best option. Choose long-term loans from the best lenders to boost your finances, consolidate debt or pay for your expenses.

Related Guides:

FAQs

Can I Take a Loan Out Over 10 Years?

What Is a Longer Loan Term?

What Are the Typical Loan Amounts for Unsecured and Secured Loans?

Related Articles

The Average Business Loan Interest Rates for 2024
Business loans are a powerful tool for helping companies of all sizes reach their...
Company Guide: Will Bounce Back Loans Be Written Off?
It goes without saying that keeping your business financially stable throughout...
Do Bad Credit Bridging Loans Exist?
Learn what financing options you have available to you if you're someone with less...
Best Bridging Loan Companies UK
The process of selling a house isn't usually quick, and if you've already got your...

Mentioned Banks

Part of one of the world’s biggest supermarket chains, Tesco Finance was launched back in 1997. The Head Office is based in Edinburgh, and although there were bricks and mortar branches...
Learn More
About United Trust Bank United Trust Bank was founded in 1955 as Bank Insinger de Beaufort PLC. It is based in London, United Kingdom. United Trust’s business is focused on providing...
Learn More