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Compare 7-year fixed rate personal loans
7 years is the longest term most unsecured loan providers will offer. With a loan of this duration, even a slightly lower interest rate will translate into big savings overall, so here's how to get the best deal for your circumstances.
Compare 7-year loans
What's in this guide?
- Compare 7-year loans
- What types of 7-year loans are available?
- How does a 7-year personal loan work?
- How to compare and choose the best 7-year personal loan
- How to get a 7-year loan
- Loan illustrations
- Should I just take out a credit card?
- Pros and cons of 7-year fixed-rate loans
- The bottom line
Whether you’re looking to build an extension, tidy up your finances or cover the cost of your dream wedding, borrowing over seven years can let you keep the cost of monthly repayments down. Lower monthly repayments makes a loan more affordable for you, in the eyes of a lender. However, borrowing over a longer period pushes up the overall cost of a loan, so it’s important to strike a balance and to shop around for the best rates you can get.
What types of 7-year loans are available?
There are different types of seven-year loans available from traditional personal loan companies. The best deal for you will depend on your individual circumstances and reasons for taking out a loan. If you haven’t already, it’s a good idea to check your credit record using one of the numerous free services available.
Below are some of the the options available for a seven-year loan, and the types of borrower they’re most likely to be suitable for.
- Unsecured, fixed-rate personal loans. For borrowers with good credit, these loans will typically be the starting point. They’re widely available from a good selection of traditional, high-street banks and new, online-only direct lenders.
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- Bad credit loans. There are many specialist lenders that focus on lending money to people with a poor credit history. Realistically, these products come with higher interest rates, but they can allow borrowers to demonstrate a responsible approach and to build their credit scores.
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- Business loans. It’s common for business owners to seek short- or long-term finance in order to take their company to the next level. It’s most likely that they will need to approach a specialist business lender, though, because most traditional personal loans stipulate that the money can’t be spent on funding a business.
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- Secured loans. With these products, a lender uses your home as collateral to protect itself against unpaid debts. This eases a lender’s fears with regards to a borrower’s ability to pay back. You might be able to be approved for terms that were otherwise unavailable on an unsecured basis.
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How does a 7-year personal loan work?
If your loan is approved, you’ll receive the money, usually within a day or two, then you begin making monthly repayments soon afterwards.
Every repayment will consist of the interest accrued so far and a small part of the money owed. In the first few months the repayments will contain a lot of interest, and by contrast the final few payments will consist mainly of the capital owed.
If repayments are missed, you could pay penalty fines. This will damage your credit record and ultimately you could be subject to legal action.
How to compare and choose the best 7-year personal loan
Here are some of the key factors to consider when comparing and choosing the best seven-year personal loans.
If you’re in a hurry, you may wish to add turnaround time to this list. Some lenders claim to be able to transfer funds to your nominated account in a matter of minutes, but we’d always advise that this is a short-term benefit and ideally shouldn’t be a deciding factor.
How to get a 7-year loan
- Once you’ve worked out how much money you need, use our comparison tables to find a competitive deal, then click “Go to site”. Make sure you choose a deal with repayments you can easily afford. Remember, lenders will be assessing whether you can afford the repayments too, and there’s a good chance you’ll both reach the same conclusion.
- You can get a good idea of whether you’ll be approved for the loan by checking the lender’s eligibility criteria. If you don’t meet the lender’s minimum criteria, don’t apply for the loan. Additionally, if the lender has one, use the “soft search” facility to get an idea of your likelihood of acceptance and the rate that you might be offered, without your credit score being affected.
- Once you’ve settled on the best deal for your needs, you’ll need to go through the application process. This typically takes 10-20 minutes and requires the submission of your personal details, some financial details and to be put through a credit check. Once you application is submitted, it will typically either be approved or declined within seconds.
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Should I just take out a credit card?
Credit cards could be a better option for you depending on your circumstances.
If you have a great credit record, and a large income, you may be eligible to borrow large amounts on a credit card, perhaps while taking advantage of a 0% interest introductory deal. While there are no deals like these in the UK that last seven years, you could potentially switch to a second 0% card when the introductory offer on the first card expires. After any low-rate introductory periods are over, credit cards generally charge a significantly higher rate than personal loans.
Self-discipline is also a factor. With a credit card you’re only obliged to make a minimum repayment each month, and you’re able to borrow more whenever you like, subject to the card’s credit limit. This means that if you take out a credit card, and you’re not organised about clearing the balance, your debt could continue indefinitely, and cost you significantly more.
Pros and cons of 7-year fixed-rate loans
- Spread the cost of big purchases
- You’ll get structured borrowing with fixed repayment amounts and a clear end-date
- Better rates available than a lot of other credit products
- Wide range of lenders to choose from, for any financial need
- Spreading the payments pushes up the price of the loan
- The debt will last over a longer period of time – if circumstances change you need to be prepared
The bottom line
A seven-year loan could be just the trick to afford the purchase that transforms your life. By spreading that large outlay into monthly payments, it becomes far more manageable for the average consumer. The lengthy term of this product does mean you’ll pay out a lot of money in interest though, so it is worth shopping around to find the best possible deal.
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