Compare long-term personal loans

Need a little longer to repay that money you borrowed? Here's what you need to know about long-term personal loans.

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A long-term personal loan is a loan that has a repayment period that’s typically more than three years. Loan terms that are this lengthy will often be used for big purchases like a car, boat, home renovations or an extravagant wedding.

Something to be careful of when it comes to long-term personal loans are your repayments. Since you’re extending the loan for as long as you can, your ongoing repayments will likely be lower each month, but you will be paying more interest overall — which makes the loan more expensive. While lower repayments can be easier to manage month to month, you’ll ultimately be in debt longer.

Fairstone Personal Loan (Unsecured)

Fairstone Personal Loan (Unsecured)

From

26.99 % APR

rate

  • Borrow from $500
  • Free online loan quote within minutes
  • Quick application process

Fairstone Personal Loan (Unsecured)

Apply today to get approved for a small to medium personal loan up to $20,000.

  • Max. loan amount: $20,000
  • Loan term: 6 months - 5 years
  • Processing time: < 1 day
  • APR: 26.99% - 39.99%.
    Varies by loan type and province.
  • Fees: None
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How does a long-term personal loan work?

A personal loan with a longer repayment term works similarly to personal loans with shorter repayment terms. The main differences include:

  • You’ll have have lower monthly repayments, which you can usually set on autopay so you don’t miss a due date.
  • The cost of your loan will be more since you’re taking longer to pay it back.

While long-term loans are usually taken out by people who are borrowing a larger amount of money, usually upwards of $10,000, they can also be taken out by people borrowing a smaller amount who are unable to afford higher monthly repayments.

You will usually be able to choose from the following long-term loan interest rate options:

  • Fixed-rate. Your rate will be determined when you sign your loan contract and will remain the same throughout your loan term. Your monthly repayments will always be the same.
  • Variable-rate. Your rate will be determined by the state of the market and will likely fluctuate throughout the loan term, meaning your monthly repayments could change from month to month.

Compare personal loans with terms as long as ten years

Name Product Interest Rate Max. Loan Amount Loan Term Fees Min. Credit Score
Fairstone Personal Loan (Unsecured)
26.99% - 39.99%.
Varies by loan type and province.
$20,000
6 months - 5 years
None
N/A
Fairstone offers unsecured personal loans up to $20,000
Mogo Personal Loan
5.90% - 46.96%
$35,000
1-5 years
NSF fee - $20 to $50
540
Mogo offers loans up to $35,000 on flexible terms.
Ferratum Personal Loan
18.90% - 54.90%
$10,000
1-5 years
None
550
An established online lender with loans up to $10,000. Now accepting applicants on El and Social Assistance.
Cash Money Installment Loan
46.93%
$10,000
6 months - 5 years
Vary across provinces/territories
N/A
Cash Money offers installment loans up to $10,000 for AB, MB and NB residents.
Fairstone Personal Loan (Secured)
19.99% - 23.99%. Varies by loan type and province
$35,000
3-10 years
Varies by province
N/A
Fairstone offers secured personal loans up to $35,000.
Cash Money Line of Credit
46.93%
$10,000
6 months - 5 years
Vary across provinces/territories
N/A
Cash Money offers line of credit loans up to $10,000 fo AB and ON residents.
Refresh Financial Cash Secured Savings Loan
9.47% - 20.07%. Varies by loan size
$25,000
3-5 years
Origination fee: $250 - $1,000 depending on loan size
N/A
No funds are provided by Refresh upfront. Instead, funds are placed into a secured account to be accessed later. Your payments are reported to the credit bureaus, potentially impacting your credit score.
ConsumerCapital Personal Loan
19.99% - 35.00%
$12,500
12 months - 5 years
None
N/A
Online lender offering personal loans from $500 up to $12,500.
LendingMate Personal Loan
43% (British Columbia and Ontario) and 34.90% (Quebec)
$10,000
1-5 years
None
N/A
LendingMate offers loans to Canadians with poor credit with no credit checks. Guarantor required for application.

Compare up to 4 providers

Is a long-term loan better than a short-term loan?

Not necessarily. Ultimately, a shorter loan term is generally better because you’ll pay less in interest. Your repayments may be higher each month with a shorter repayment period, but your loan will be cheaper.

A long-term loan will mean your monthly repayments will be less, however the total cost of the loan will be more since your loan term is longer.

For example, a $20,000 loan repaid over four years at a 12.5% APR will add up to $532 in repayments each month and $5,517 in interest over the course of the loan. If that term was extended to seven years, you would be paying $358 per month in repayments, but the interest you pay would almost double to $10,108.

This is why it’s important to budget in your repayments and choose the shortest loan term possible.

Five important questions to ask when comparing long-term personal loans

  • What is the interest rate of the loan?
    This largely defines what your repayments will be over the course of the loan. Take this into account and calculate what your repayments will be to determine if you’ll be able to make them. You will also likely have the option to choose between fixed-rate and variable-rate interest rates.
  • Is the loan secured or unsecured?
    Secured loans require you to provide some kind of collateral and will typically have lower interest rates in comparison to unsecured loans. If you’re buying a car, the car will usually serve as collateral. Other forms of collateral include equity on your home, expensive jewelry or antiques.
  • How much is the loan amount?
    The amount you can borrow depends on various factors such as your credit score, what you need the funds for, your ability to provide suitable collateral, your income and your monthly expenses.
  • Can you repay the loan early?
    Repayment flexibility may be important to you even if you want a long-term loan. You may come into some cash and want to make extra repayments or decide you want to pay your loan off altogether before the original payoff date. Find out if you can do this without incurring extra fees.
  • What are the other fees and charges on the loan?
    Other fees and charges will likely apply. These fees should always be clearly listed on your loan agreement. If you’re unsure of any charges, contact the lender directly.

Pros and cons to consider

Pros

  • Lower repayments. A loan with a longer term means lower monthly repayments, giving you more flexibility with your finances during the term of the loan.
  • You could hack the loan. By choosing a longer loan term and making additional repayments, you could pay your loan back sooner while taking advantage of the lower repayments.
  • You could get financing for huge expenses. Long-term personal loans allow you to finance more expensive purchases such as cars or boats.

Cons

  • You’ll likely pay more in interest. A long-term loan attracts more interest because the length of the loan term is much longer. This means your loan is more expensive overall.
  • You’ll be in debt longer. A lengthier repayment period keeps you in debt until you completely pay it off.

Three things to watch out for

  • Excessive debt. While taking out a long-term personal loan might seem like a good idea, it might lead to debt that may be difficult to repay. Try to make a repayment plan ahead of time and account for unexpected expenses in your budget.
  • Fees and charges. Make sure you go through the fine print on your contract and find out exactly what you have to pay in terms of fees and charges. These can come in the form of application fees, insurance costs, origination fees, early repayment fees, settlement charges and late charges, among many others.
  • Tendency to splurge. Long-term personal loans normally set a minimum loan amount that may leave you taking out more money than you actually need. If you’re not responsible with that extra cash, you can be tempted to spend it elsewhere. Remember, only borrow as much as you need.

Savings with a shorter loan term

4-year loan7-year loan
Interest rate12.99%12.99%
Loan amount$40,000$40,000
Total interest$11,499$21,107
Difference+ $9,608 more in interest

How to apply for a long-term personal loan

Applying for a long-term personal loan is usually straightforward. Before you apply for a loan, be sure to compare your options and find the most suitable lender for your financial needs. As part of the application process, most lenders will want to take a look at a few things including:

  • Your credit history
  • Your identification
  • Proof of residency
  • Your employment status and history
  • Proof of income

If you’re applying for a secured loan, you’ll have to provide documents to prove ownership of the collateral you’re providing.

Frequently asked questions

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