Find Long-Term Loans with Borrowell

A loan is considered “long-term” if it has a payback period longer than five years, with the average length of a long-term loan falling around seven years. Some long-term loans, like student loans, tend to have slightly longer terms, closer to ten years in length. The longest term for a loan in Canada is usually around 35 years and is traditionally reserved for mortgages.

Since long-term loans spread your payments out over a longer period of time, your lender has the opportunity to earn more interest from you over time. As a result, your interest rate (and monthly payment) on a long-term loan will often be lower than a short-term loan.

Monthly payments can be deceiving, however. Since a long-term loan is stretched out over many years, the monthly payment will be significantly lower, but that doesn’t always mean the interest rate is lower. Make sure to compare your interest rates between long and short-term loans directly to make sure you are getting the lowest possible rate. 

You can use Borrowell to compare interest rates on a wide range of loans that are available to you.

There are two primary types of long-term loans: secured and unsecured loans. Secured loans are backed by an asset as collateral. Car loans and mortgages are typical examples of secured loans. In each case, the loan is secured by the physical item you’ve purchased. Secured loans tend to have lower interest rates because the collateral can be seized if you don’t make your payments on time.

An unsecured loan does not have a physical asset as collateral. Instead, your lender must rely on a credit check to determine your credit score and financial profile to determine whether you qualify for a loan. As a result, long-term unsecured loans often have slightly higher interest rates.

Yes! You can still qualify for a long-term loan with a low credit score. Keep in mind that a low credit score can make it more challenging to qualify for any loan, including long-term loans. If you find yourself in need of a long-term loan and have a low credit score, several lenders specialize in lending to borrowers with a low credit score, but their interest rates tend to be higher than traditional lenders.

You can sign up for Borrowell to check your credit score for free and see what long-term loans you qualify for from trusted Canadian lenders.

Alternatively, some traditional lenders will accept co-signers or guarantors for long-term loans. A co-signer or guarantor promises to pay your loan if you don’t make your payments on time. Possibly paying for someone’s long-term loan is a big responsibility to take on, which is why most co-signers or guarantors are related to their borrowers.

When applying for a long-term loan, you’ll need the following information:

• Name, address, email address, and social insurance number

• Income information including pay stubs and a letter from your employer

• A valid driver’s license

• Details about any debts you may have, including statement balances

• Consent to accessing your credit score through a credit check

If you’re applying for a long-term loan to purchase a home or a vehicle, you’ll also need details about that asset.

Some loans, like mortgages, or car loans, can only be used for specific types of assets. Other kinds of long-term loans, like personal loans, are lump sums of cash that you can use for anything. That said, it’s a good idea to tell your lender what the purpose of the loan is since that information may help you qualify for a lower interest rate.

The answer to this question depends on the type of long-term loan. Some loans, like mortgages, have limits on how quickly you can pay off the loan. The limits exist because your lender offers you a lower interest rate on the assumption that they will earn at least a set amount of interest on the loan. The limits on extra payments ensure they make a minimum profit.

Other types of long-term loans, like student loans and many car loans and personal loans, do not limit early payoff. Paying off your loan early will not hurt your credit score. If you plan to pay off your loan early, ask your lender if there are any limitations on early repayment before signing your loan agreement.

The longest period of time you’ll find for a long-term loan is 35 years.

Long-term loans can either be secured by an asset or unsecured. Secured loans are backed by an asset that will have a lower interest rate because they are less risky for the lender, who can seize your asset if you default on your loan.

Unsecured loans will have more stringent qualification criteria, especially if you plan to borrow a more considerable sum. Be prepared for your lender to scrutinize your income and pull your credit score via a credit check during the qualification process if you apply for an unsecured loan.

Long-term loans can be obtained by a wide variety of lenders, with widely differing interest rates and terms. The best interest rates will come from traditional lenders like banks and credit unions. These lenders often allow you to submit your application online, but you may have to go to a branch to sign the final documents in person. 

If you’re looking for a long-term loan that you can qualify for entirely online, you should use a loan aggregator like Borrowell to find lenders who specialize in online lending. Borrowell works with over 50 trusted lenders to match you with loans that suit your financial profile. If you have unique financial circumstances like a low credit score, Borrowell can help there, too, matching you with lenders that will work with your circumstances.

A long-term loan is a big commitment, and we highly recommend you compare options from several lenders before locking in your loan and interest rate.