Blog Misc Should You Get Online Long-term Personal Loans?

Should You Get Online Long-term Personal Loans?

date September 14, 2021 time 5 min read 563 views

In recent years, many people tend to prefer looking for online long-term personal loans instead of turning to traditional banks or credit unions. Wondering why? Let’s jump in.

Getting loans from traditional banks or and credit unions might require lots of documents, but applying for an online long-term personal loan can be a simple and convenient. Some online providers even can help you to compare loans to find the best option for your financial situation.

Also, online lenders can approve borrowers with a wide variety of credit scores. Some offer both large and small loan amounts flexibly, depending on your borrowing needs. 

What is a long-term personal loan?

A long-term personal loan has repayment terms lasting longer than 5 years. When it comes to interest rates, one of the biggest problems is that most long-term loans have higher interest rates than short-term loans.

However, short-term loans leads to higher monthly repayments. Depending on your situation, you may seek out long-term personal loans of 5 years or more, which is considered a better option to reduce the monthly payment burden. 

Thanks to the development of technology, online long-term personal loans are considered alternatives to traditional banks. This kind of loan is a convenient and fast option for borrowing money. These loans have annual percentage rates between 6% and 36%, and amounts range from $1,000 to $100,000.

Online lenders will assess credit risk and determine whether to extend credit based on borrowers’ FICO scores with other details on borrowers’ credit reports. Some online lenders work with bad-credit borrowers (629 or below FICO score). Sometimes lenders offer features like rate beat guarantees or the option to skip a monthly payment if they accept borrowers with good and excellent credit (a FICO of 690 or above). Besides, online lenders typically allow borrowers to pre-qualify and preview estimated rates without affecting their credit score.

Long-term personal loans are often provided by banks, credit unions, and online lenders. There are a variety of popular lenders with long-term online lending options, including SoFi, LightStream, and Marcus, among other examples.

Why should you get online long-term loans?

Despite having competitive advantages, long-term personal loans offered by traditional banks or credit unions have several limitations. Some banks offer an online loan option, but many require in-person appointments meaning you have to visit the nearest branch to complete a loan application. 

Besides, as few banks offer an online pre-qualification process, you might not be able to the rates and terms you qualify for before applying. Another drawback is that APR may be driven up because of costs from operating brick-and-mortar locations. 

All these problems are solved with online lending long-term thanks to some groundbreaking features. For instance, we offer crypto-backed loans instead of relying on your credit score. Other platforms offer alternative solutions too.

In addition, our KYC process takes a few minutes, and you can be approved in a matter of hours. Even before you have been approved, you will be able to see our fees and other terms so you can quickly identify the right loan for you.

With banks and other traditional lenders nearly universally checking credit scores, there are alternatives out there for you.

Online lenders are typically able to offer competitive rates due to the lack of brick-and-mortar locations. Without physical bank branches to maintain, their overhead is likely to be less than a traditional bank.

As we always advise, be careful about how much you borrow. It is essential to keep any debt manageable and make sure your repayments are affordable.

Why should you get online long-term loans? Source: Pixabay.

Long-term Loan Alternatives

When it comes to borrowing money, a long-term personal loan is not the only option. You can consider the pros and cons of the following alternatives:

Credit cards

In terms of advantages, credit cards allow you to reuse your limit as you repay your balance, and there’s no fixed repayment term. You can take your time repaying the balance as long as you make the minimum payment every month. It is more flexible than personal loans and also lets you pay extra on the credit card balance with no fee. However, a credit card invariably comes with higher interest rates, and sometimes you can be tempted to rack up a big debt.

Home Equity Loans

Home Equity Loans often come with lower interest rates and they have no restrictions on how you use the fund. However, this kind of loan has two big drawbacks. The first one is you could lose your home if you default on the loan. The second one is that closing costs and fees can add to the overall loan cost.

Cash-out refinancing

Cash-out refinancing typically offers a lower interest rate than a home equity line of credit, or a home equity loan. This is a mortgage refinancing option in which a new mortgage will replace an old one with a larger amount than owed on the previously existing loan.

The biggest drawback of cash-out refinancing is that you could lose your home if you default on the loan as your home is the collateral. Besides, your new mortgage will have different terms from your original loan, so it takes a longer time to apply and get approved. 

Peer-to-peer lending (P2P)

P2P lending allows borrowers to access loans with interest rates lower than they could obtain from traditional lenders. Additionally, the application process is quick and convenient as peer-to-peer lending platforms are typically entirely online. 

Most P2P platforms have a waiting list of investors to provide loans to borrowers with an automated matching process. This means turnaround time on getting your money can be very quick, sometimes as little as a few hours. 

P2P lending allows borrowers to access loans with interest rates lower than they could obtain from traditional lenders. Source: Pixabay.

When it comes to Peer-to-peer-lending (P2P) platforms, MyConstant could be a great option for you. 

With MyConstant, you can get a crypto-backed loan in minutes from just 6% APR with very little risk involved. We also allow you to lend money or cryptocurrency to borrowers around the world – at an interest rate of 9%.

Other benefits include:

  • 24/7 customer service.
  • Rates as low as 6%.
  • Early repayments for lower rates.
  • Instant matching.
  • Store and borrow against over 70+ different cryptocurrencies like qtum coin.

Or, if you’re prepared to take on some risk, you can try earning interest on crypto to earn up to 7% APR.

Sounds interesting? Sign up for a free account today and start investing.

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George Schooling

George Schooling

Earn up to 15% APY on your idle stablecoins (USDC, USDT)
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