With Loan Princess, you can take out long-term loans for between £500 and £50,000 over a few weeks or up to five years. Loan Princess even arrange long-term loans for bad credit clients. We’re here to help you out in any way we can, no matter what your situation.
But how do you choose the right type of loan for you? Should you choose a short-term or a long-term loan? In this article, the team at Loan Princess consider:
• how much you want to borrow is an important factor in whether you should take out a long-term loan,
• how loan repayments differ between short-term and long-term loans,
• long-term loan interest rates,
• are there any fees you have to look out for with long-term loans,
• making the right decision for you on whether a long-term loan is suitable, and
• how Loan Princess can help you with long-term loans.
How much do you want to borrow?
When you think about the things we want and need in the life of any value, most of us Brits don’t have enough put by in savings to afford it. Whether it’s a new car, an extension to your home, or the holiday of a lifetime, you need to find a lot of money to have them now.
The more you want to borrow, the more likely it is that you’ll need to take out a long-term loan. You might want to borrow £15,000 for a new conservatory. However, what you’ll find is that most short-term loan companies (including payday loan companies) have a maximum amount they’ll allow you to borrow. That maximum amount may be as little at £50 or as much as £2,500. If you approach a payday loan lender or a short-term loan company asking for more than they normally lend, they’ll normally give you one piece of suggestion – “go out and find companies offering long-term loans”.
If you want to take out a loan for more than £1,000, it may be difficult to find a payday lender happy to work with you. If you want to borrow more than £2,500, most short-term lenders won’t be able to help. In these cases, you’ll be left with no choice but to approach lenders or go through a broker to find a long term loan (including long-term loans for bad credit).
There is a big difference between the way that short-term loans and long-term loans are paid back.
With short-term loans, you will repay your loan in instalments every month (although some lenders will want you to pay back every week). The level of interest rate you pay on short-term loans will generally seem a lot higher than a long-term loan. With a payday loan, instead of paying back over a number of instalments, you’ll just have one repayment to make – you pay it back in full plus the interest rate on your next payday or within 30 days (whatever length of time you agree with your lender).
Long-term loans work very different. Because the amount of money you’re borrowing is much higher, the amount you pay back on your monthly instalments will be larger. However, the interest rates of long term loans (including long-term loans for bad credit applicants) will be a lot lower than you’d have to pay on short-term loans or payday loans.
Interest is like a fee or charge you pay for having access to money that belongs to someone else. If you borrow £1,000 and pay back £100 in interest, that interest is the £100 charge that your lender makes in return for transferring the £1,000 to your account.
By law, every lender and broker must advertise something called their Annual Percentage Rate (APR). The APR is what it would cost to borrow money from a lender over the course of a year. Even if you don’t borrow money for a year, your lender must advertise their APR as if you were paying back that level of interest over 12 months. That’s why APRs on payday loans and short-term loans look so large.
Are there any fees?
Loan Princess does not charge any fees on organising short-term loans or long-term loans for any of its clients. Most lenders also don’t charge borrowers for arranging a loan either.
However, it’s always best to check so always read the terms and conditions before you sign any loan agreement. Some lenders charge you for paying back your loan early while others don’t. Lenders will also normally charge a fee if you miss a repayment or they send out a letter to you if your account is in arrears. By law, each lender is obliged to be upfront and honest in their terms and conditions about any fees they might charge you but please remember that it’s your responsibility to check.
Making the right decision for you
Taking out a loan is always a decision you need to do a lot of research on. Loan Princess is here to help our customers find the money they need but we always recommend that you only ask for the money you need. If you ask for more money than you need, you’ll pay interest on it and that’s just an extra cost you don’t require.
We help with long-term loans of between £500 and £50,000 and with long-term loans for bad credit applicants. We’re not a lender – we’re a broker. We work with a very wide panel of Financial Conduct Authority-licensed lenders. When we receive your application, we match the details on your application together with what’s on your credit report to just the lenders we’re sure will want to provide you with the finance you need.
Our service doesn’t cost you a penny and you’re under no obligation to take out the very best offer we find for you. If you decide that we’ve found a long-term loan deal which works for you, just read the terms and conditions to make sure you’re happy with them. If you are, sign the online paperwork to agree to your loan.
To start your application for a long-term instalment loan, please click here.