How do three-year personal loans work?
A three-year personal loan is a loan that you repay with regular monthly payments over 36 months, plus interest and fees. Three years is one of the most common term lengths for a personal loan.
Most lenders also offer five-year terms as well. And almost all personal loans come with fixed rates, which mean you’ll have the same payment each month.
Can I qualify for a three-year personal loan?
You can qualify for a three-year term if you show the lender you have in your budget for the monthly payment. This can range from under $100 to over $3,000 in some cases.
If the monthly payment on a three-year loan is too high for your budget, your lender might suggest a longer term. With personal loans, you can often make extra payments with no penalty — so even if you qualify for a five- or seven-year term, you can still pay it off over three years.
What types of loans can I get with a three-year term?
Three-year fixed rate loans can be used for various purposes. There are a few different types available including:
- Secured personal loans. If you’re considering a secured personal loan, you can typically use the equity in your home, money in a savings account or any other valued asset — fine art or jewelry — as security for the loan.
- Unsecured personal loans. This type of loan requires no secured asset and can be used for nearly anything from under $100 to consolidating debt to making a large purchase.
- Car loans. When buying a new or used car you’ll find various options for three-year fixed loans. And because it’s secured by what you’re purchasing, you should be able to get a good rate.
How to compare my three-year loans
If you’re certain that a three-year loan is right for you, the next step is to compare all of your options to get the best deal possible. Here are features to look out for when comparing:
- Interest rate. You’ll be locked into this interest rate for three years, so be sure it’s competitive. Secured loans tend to have better rates than unsecured loans — but keep in mind that you’re risking an asset if you fail to make payments on a secured loan.
- Upfront and ongoing fees. Are there any application or origination fees? Will you be charged monthly or annual fees? Always calculate the true cost of the loan by incorporating interest rates and fees or looking at the annual percentage rate (APR).
- Other fees. Find out before you apply if your loan will attract fees for making additional payments or repaying the loan ahead of time.
- Eligibility. Factors vary by lender, but a few things that may be taken into consideration are your credit history, debt-to-income ratio, annual income and employment.
How much does a three-year loan cost?
The cost of a three-year loan depends on the loan amount and APR. Here’s how much your estimated monthly payment could be on a three-year loan with different loan amounts and interest rates:
Loan amount | 5% APR | 10% APR | 15% APR | 20% APR |
---|---|---|---|---|
$3,000 | $89.91 | $96.80 | $104 | $111.49 |
$4,000 | $119.88 | $129.07 | $138.66 | $148.65 |
$5,000 | $149.85 | $161.34 | $173.33 | $185.82 |
$10,000 | $299.71 | $322.67 | $346.65 | $371.64 |
$15,000 | $449.56 | $484.01 | $519.98 | $557.45 |
$20,000 | $599.42 | $645.34 | $693.31 | $743.27 |
$100,000 | $2,997.09 | $3,226.72 | $3,466.53 | $3,716.36 |
Calculate the cost of a three-year loan
Use our calculator to see how much a three-year loan might cost each month and in total interest based on different loan amounts, interest rates and fees.
Monthly repayments calculator
Calculate how much you could expect to pay each month Your loan |
---|
Loan amount |
$ |
Loan terms (in years) |
|
Interest rate |
% |
Fill out the form and click on “Calculate” to see your estimated monthly payment.
or
Compare personal loans nowBased on your loan terms
Principal | $ |
---|---|
Interest | $ |
Total Cost | $ |
Pros and cons to consider before applying
Pros
- You can lock in a competitive rate
- Shorter loan terms help save on the total cost of the loan
- Three-year terms are available at almost all lenders
Cons
- Monthly payments can be high for large loan amounts
- Some lenders charge a fee to pay back your loan early
- You might not qualify if you don’t have consistent cash flow
Compare even more options with our guide to personal loans.
More guides on Finder
-
Liberty First Lending Review: Be Wary of Bait & Switch
A review of Liberty First Lending, a company that offers debt settlement services and possibly loans.
-
Does Bank of America offer personal loans? No – Here Are 5 Alternatives
See whether Bank of America fits your loan needs. The bank offers a variety of loans with a simple online application and discounts for existing customers.
-
CoffeeBreakLoans Review: Is It Legit?
Connect with lenders offering loans for all credit types, but lack of customer support and reviews could be a deal-breaker.
-
Achieve Personal Loans Review: Good for Co-Applicants
Get loans with unique rate reductions and options for debt consolidation, even with lower credit.
-
Does PayPal let you borrow money with a personal loan?
6 options to finance online shopping, borrow small amounts or compare lenders fast.
-
Loans like Best Egg
Find lenders similar to Best Egg for low-interest personal loans.
-
Does Capital One do personal loans? Not anymore, but here are 4 alternatives
The four best alternatives when you’re looking to borrow from a lender similar to Capital One.
-
How much money do you need to make to get a personal loan?
Your income is a crucial factor in determining how much you can borrow and if you’re even eligible. Find out exactly what you need to know before you apply.
-
Get a $1,500 loan
If you need cash for an emergency or to last you until payday, a $1,500 short-term loan could help — but with potential drawbacks.
-
Get a $1,000 Loan in 24 Hours
If you’re in need of $1,000 for an emergency, start a comparison of these bad credit lenders offering quick, unsecured $1,000 loans.
Ask a question