Long Term Loans

If you're after a long term loan there are several different ways to borrow your money. You could try a personal loan, a secured loan, or a re-mortgage. Here we will cover each option starting with the longest payback option.

A Re-mortgage
With this option it is possible to borrow money over a period of up to 40 years. It also allows you to choose if you want fixed rates or variable rates. As with all options you must take careful consideration when borrowing money over such a period. You can easily end up paying back well over 3 times the original amount of money you borrowed. The money is also secured on your property; meaning if you can't pay it back then the property could be repossessed.

A Secured Loan
You can borrow money over up to 25 years with a secured loan. This is again secured on your home. The APR is likely to be competitive, especially if you have an above average credit rating. Because of the credit crunch there are few lenders offering secured loans at the moment (in 2009). The most you can borrow is also likely to be £75000, whereas it used to be £100,000 before the crunch.

A Personal Loan
The maximum period you can borrow over with a personal loan is 5 years. So this might be pushing the boundaries of what you consider long term. But it's a good, quick way to borrow money at a great APR, typically only bettered by a mortgage. You can borrow up to £25,000 this way.

Borrowing 5,000 Pounds

There are different ways to borrow 5000 pounds. It depends on your financial situation, your residential situation, and your personal preferences when it comes to paying back money. Here are the 3 main options with which you could borrow this amount:

A Personal Loan

This is the easiest way to borrow money. Nearly anyone with a job can take out a loan this way, and get a good APR. With personal loans you pay back the money over a period between 6 months and 5 years, and the APR is between 6 and 15% for most people. Those who may struggle to get accepted for a personal loan are people with a poor or very poor credit rating.

A Secured Loan

This is better for people with a less than good credit rating, as you can usually get the same APR from a personal loan otherwise. The "secured" bit comes from the fact that the loan is secured on your house. If you can't repay it, the lender can repossess your home. This obviously makes it less appetising than a personal loan, although in reality few people are ever repossessed. You can repay over 1 to 25 years with a secured loan.

A Re-mortgage

This is likely to be the way you will get the lowest APR for your money. But usually you will be borrowing over quite a long period with a re-mortgage, so ultimately you will pay more interest back than with a loan, although you will have lower monthly repayments. If you can afford it, it's probably better to go for a loan, but if money is short a re-mortgage may be a good option.