Read this guide if you want to find out more about long-term loans and which banks offer the best long-term loans in the UK. We will explain what the benefits and risks of long-term loans are too, so you know what to look out for.
What is a long-term loan?
As the name suggests, a long-term loan has a longer term for repayment. If you get a short-term loan, then you will have less time to pay it back. A long-term loan gives you more time to pay off the loan, which could make it a more affordable option. Long-term loans can span from 1 year to 15 years or even longer. Unsecured long-term loans can offer amounts ranging from £1,000 up to £25,000 or more. They can help you with funding a large upfront expense like a wedding, a new car, or home improvements. You can have the money when you need it and pay it back later.
What are the pros and cons of a long-term loan?
As mentioned, the benefits of long-term loans include larger loans and longer repayment terms. They usually have lower interest rates as well. However, the longer the loan term, the more you are likely to end up paying in interest overall. Long-term loan providers often give you the flexibility of choosing the amount that you want to borrow and the length of the term. Fixed repayments make it easier to budget every month. The downside of long-term loans is that there may be fees for late payment or paying off the loan early. You will have less choice if you have bad credit.
Best Long-Term Loans in the UK
Below you can look through the details of 14 long-term loan providers in the UK. You can use the loan calculator on each provider’s website to check how much your specific loan would cost. Most of them also have a free eligibility checker which will not affect your credit score. Remember that not everyone will get the advertised interest rates.
M&S Bank Long-Term Loan
Marks & Spencer is one of the financial service providers with the lowest interest rates for selected personal loans. They allow lump sum payment and debt consolidation. Deferment is possible for 3 months, but they do still charge interest for that period. There are no set-up fees, but there are no payment holidays either. You must be an adult UK resident with an income of at least £10,000 to apply. They calculate interest daily and charge for early repayment.
- Loan amount: £1,000 – £25,000
- Minimum term: 1 year
- Maximum term: 7 years
- Representative APR: 2.9% (£7,500 – £20,000)
Sainsbury’s Bank Long-Term Loan
Sainsbury’s offers personal loans up to a higher amount, but the low interest offer only covers a lower range. They allow deferment for 2 months if you don’t want to start repayments right away. However, they still charge you for the interest. Eligibility for a Sainsbury’s loan requires a good credit history, no CCJs, and Nectar card membership. They allow loans for most purposes, which includes debt consolidation, but they do not allow repayment breaks.
- Loan amount: £1,000 – £40,000
- Minimum term: 1 year
- Maximum term: 7 years
- Representative APR: 2.9% (£7,500 – £20,000)
Admiral Long-Term Loan
Admiral doesn’t just offer car insurance – you can also get personal loans from Admiral. You can apply if you are between 18 and 74 years old, with a good credit history and no CCJs. Admiral will allow you to use their loans for many purposes. Repayment breaks are not available, though, and they do charge a fee if you pay off the loan early.
- Loan amount: £1,000 – £25,000
- Minimum term: 1 year
- Maximum term: 5 years
- Representative APR: 2.9% (£7,500 to £15,000)
Tesco Bank Long-Term Loan
Tesco Bank allows a repayment holiday at the beginning of your loan term so that you can delay the start of your repayments. They will apply a charge if you repay the whole loan earlier than your repayment schedule. You can use the Tesco Bank loan for most things, from renovations to holidays. They will give you a decision immediately if you apply for a Tesco loan online. You can then select a date for your monthly repayments and apply for an initial break.
- Loan amount: £1,000 – £35,000
- Minimum term: 1 year
- Maximum term: 5 years
- Representative APR: 3% (£7,500 – £25,000)
Yorkshire Bank Long-Term Loan
Customers with big ideas can get help bringing them to fruition with a loan from Yorkshire Bank. However, their maximum APR for loans below £25,000 can be as high as 29.9%. You can get loans to help you repay existing loans from Yorkshire Bank, but only if that is the purpose of less than 50% of the new loan amount. There are also shorter repayment terms available for lower loans. If you want a longer loan term, you must borrow more money.
- Loan amount: £1,000 – £35,000
- Minimum term: 1 year
- Maximum term: 7 years
- Representative APR: 3% (£7,500 – £25,000)
Nationwide Long-Term Loan
Existing customers who bank with Nationwide can also apply for personal loans from their bank. There are no hidden fees and you could receive the money in your account within 2 hours of applying. They have an acceptance indicator, offer no-risk quotes, and supply quick decisions. Nationwide will begin charging interest as soon as you receive the funds from them. You must have a main Nationwide current account to be eligible for the 3% interest.
- Loan amount: £1,000 – £25,000
- Minimum term: 1 year
- Maximum term: 7 years
- Representative APR: 3% (£7,500 – £25,000)
AA Long-Term Loan
You may know the AA for car insurance and breakdown cover. If you are a new AA loans customer, then you can get AA Breakdown Cover for £15 for a year. To get an AA loan you have to be at least 21 years old (and no more than 70 years old). They do not charge for settling loans early. However, the AA does not allow holidays from repayments. If they do allow a deferment then they will charge interest on it. They calculate the interest each day.
- Loan amount: £1,000 – £25,000
- Minimum term: 1 year
- Maximum term: 7 years
- Representative APR: 3.1% (£15,001 – £25,000)
Post Office Long-Term Loan
Even if you are new to Post Office Money, you could get a long-term personal loan to cover most upfront expenses. Most cases will receive an instant decision upon applying for a Post Office loan. They can transfer the money the next day if they grant your loan. If you are able to pay off the loan early, there won’t be any penalties from the Post Office. However, their lower APR only applies to loans from a minimum of £15,001, so it is better for larger costs.
- Loan amount: £1,000 – £25,000
- Minimum term: 1 year
- Maximum term: 7 years
- Representative APR: 3.1% (£15,001 – £25,000)
Hitachi Long-Term Loan
You’ll probably know Hitachi as a manufacturer of consumer electronics, but they also have a Personal Finance business. Hitachi offers loans to applicants who are over 21 years old and have a good credit history. There are no holidays from repayments with Hitachi, but they do not charge a fee for early repayment. The application is online and requires an electronic signature. If Hitachi accepts your application then you could get the money in 48 hours.
- Loan amount: £2,500 – £50,000
- Minimum term: 2 years
- Maximum term: 5 years
- Representative APR: 3.2% (£7,500 to £25,000)
HSBC Long-Term Loan
Existing HSBC current account holders can get instant decisions on loan applications and receive the money immediately after signing the loan agreement. Non-HSBC customers can still apply, but it will take 2-5 days to receive a decision and a further 3 days to receive the funds. At HSBC, you can top up your existing loan or make overpayments with no additional charge. HSBC will base the APR on your circumstances, with a 21.9% maximum.
- Loan amount: £1,000 – £25,000
- Minimum term: 1 year
- Maximum term: 8 years
- Representative APR: 3.3% (£7,000 – £15,000)
NatWest Long-Term Loan
Only existing NatWest customers can apply for a personal loan from them. You must hold a NatWest current account, credit card, or mortgage. You also need to be at least 18 and have a good credit rating to be eligible. NatWest does not allow repayment breaks and will charge a fee for early settlement. They allow customers to use the loan for debt consolidation, among many other purposes. They charge interest daily, including for deferment.
- Loan amount: £1,000 – £50,000
- Minimum term: 2 years
- Maximum term: 8 years
- Representative APR: 3.4% (£7,500 to £19,950)
RBS Long-Term Loan
Similarly, existing customers with the Royal Bank of Scotland can apply for personal loans from RBS. You must be 18 years old with good credit and hold an RBS current account. You can also apply for a loan if you have a credit card or mortgage with RBS. As NatWest is also a subsidiary of the Royal Bank of Scotland Group, the terms of their loans are more or less the same. You just need to be a customer of the respective bank to be eligible for the loan.
- Loan amount: £1,000 – £50,000
- Minimum term: 2 years
- Maximum term: 8 years
- Representative APR: 3.4% (£7,500 to £19,950)
Halifax Long-Term Loan
Personal loans are available from Halifax bank to most UK residents aged 18 or over. You do not have to bank with Halifax to apply, or you could be a new customer. You only need to have had a Halifax current account for 1 month if you want to apply for a loan above £25,000. Halifax does require applicants to have a steady income and not be in full-time education. They offer up to 2 repayment holidays per year, but they can charge up to 58 days of interest.
- Loan amount: £1,000 – £50,000
- Minimum term: 1 year
- Maximum term: 7 years
- Representative APR: 3.5% (£7,500 to £25,000)
John Lewis Long-Term Loan
John Lewis Finance does not charge administrative fees on their personal loans. This means that you can make additional repayments or settle early without extra charges. They also offer annual payment breaks if you need to free up some money once a year. There is a maximum APR of 20.9% on lower loans. The APR for loans more than £5,000 ranges from 2.9% to 5%. You may or may not get the representative rate, depending on your circumstances.
- Loan amount: £1,000 – £25,000
- Minimum term: 1 year
- Maximum term: 5 years
- Representative APR: 3.6% (£5,000 to £7,499)
