Do you wish to take out a big loan from a bank or a credit lending institution but want to pay tiny instalments on it over a period of several years? If your answer is ‘Yeah dude’, then wait no more and start looking for a credit lender that provides best deal on a long term loan. Before you start a search, it is wise to have a little bit of an overview as to what a long term loan is so that you don’t make a fool of yourself when talking to a credit officer.
Under a long term loan, a borrower of the money take out a loan in one lump sum and then pays it back along with the interest amount over a period of several years. In UK, generally a long term loan is granted by banks to individuals for 3 years and 5 years. A long term loan can be availed with or even without collateral but since an unsecured loan with no collateral will have a greater loss for a bank or credit lenders in case there is a default, that’s why unsecured long term loans have a high risk premium attached to it.
This long term credit facility is often availed by businesses, entrepreneurs, students and even first time home buyers that need a big fat heavy financing right at the beginning but will be able to repay the amount in instalments over years. If you are also looking for avenues from where you can take a long term loan on favourable terms then here are some best types of long term loans that we have shortlisted for you.
Mortgage for Home Buyers
If you want to purchase a home of your dreams then probably you will need big fat financing from the lender. The most common type of long term loan extended to the customer for buying a house is a mortgage. In a mortgage, borrowers do not have to keep anything as collateral and the home that they are buying is treated as collateral. Mortgages are popular in UK and you can easily find a banker or a credit officer who will be willing to extend you the mortgage facility if you have a good credit score. According to a statistics by Bank of England, mortgage loans have increased by 2.5% this year as compare to previous year.
Bonds for Business
If you think that the cost at which the bank is offering capital is too high then a business can choose to subtract the banker from the equation of business and borrow the money from other corporations and general public by floating a bond in the money market. By this method, a company can raise funds immediately at a low cost and then pay a fixed amount of coupon rate to the bondholders annually.
Student Loans for NINJAs
Student or millennials that are borrowing loans to finance their education are the NINJAs. No, they won’t chop off anybody’s head; they are NINJA in the sense that they have No Income, No Jobs and No Assets. But this can’t be an excuse to ditch the studies so they too, in the world of financial capitalism, can borrow a long term loan and pay it after their graduation.