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When you take out a personal loan, you may have the option to pay your loan off over several possible timelines. You might be able to pay it off in as short as a few months or you may have the choice to stretch payments out for a decade. There are advantages and disadvantages associated with longer repayment terms on personal loans.
Longer repayment terms on personal loans will lower your monthly payment and a long-term loan might make you feel as though you're under less pressure to get the loan paid back quickly. However, longer repayment terms on personal loans also make those loans more expensive.
The calculator below can help you see how different loan terms affect your monthly payment. Just enter the amount you plan to borrow, the term you want, and the interest rate. If you're not sure what interest rate to use, 14-18% is a good starting point for borrowers with average credit -- check out our guide to interest rates for personal loans for more information.
Some of the biggest benefits of choosing longer repayment terms on personal loans include the following:
These are all major benefits that should be carefully considered when deciding whether to choose longer repayment terms on a personal loan. If you don't have a ton of spare cash and you have other pressing financial needs, the benefits -- including a lower monthly payment -- will likely outweigh the downside.
Get the best rates and terms to fit your needs. Here are a few loans we'd like to highlight, including our award winners.
Lender | APR Range | Loan Amount | Min. Credit Score | Next Steps |
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Apply Now for Discover Personal Loan
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Rating image, 5.0 out of 5 stars.
5.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
|
7.99% - 24.99%
|
$2,500 - $40,000
|
660
|
Apply Now for Discover Personal Loan
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![]()
Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
|
7.80% - 35.99%
|
$1,000 - $50,000
|
None
|
|
![]()
Apply Now for Best Egg
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Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
|
8.99% - 35.99%
|
$2,000 - $50,000
|
550
|
Apply Now for Best Egg
Powered by Credible |
While there are significant advantages to longer repayment terms on personal loans, there are some big downsides too. Here are some of the disadvantages:
As you can see, there are many situations where the disadvantages outweigh the benefits of longer repayment terms on personal loans. If becoming debt-free ASAP is important to you and you have the wiggle room in your budget to increase the monthly payment, a shorter repayment timeline is usually the way to go.
The right choice on your loan repayment timeline will vary depending on your financial situation, including how much flexibility you have in your budget, how much of a monthly payment you can afford, and what your money goals are. Before you decide whether you want a short-term loan or a long-term loan, carefully consider which will work best in your particular situation. Once you have your loan, you have to stick to the terms unless you refinance to a new loan with a different repayment timeline.
Looking for a personal loan but don’t know where to start? Our favorites offer quick approval and rock-bottom interest rates. Check out our list to find the best loan for you.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
Please note that this calculator is not personalized financial advice and should not be considered or used as such. Nor are we promising that by use of this calculator, will you be able to save more money, preserve wealth, or otherwise.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
Please note that this calculator is not personalized financial advice and should not be considered or used as such. Nor are we promising that by use of this calculator, will you be able to save more money, preserve wealth, or otherwise.
*Upstart Loan Disclaimer
The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 21.97% and 36 monthly payments of $35 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $12,646 including a $626 origination fee. APR is calculated based on 3-year rates offered in the last 1 month. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application.