You’d go for a long-term personal loan in Ghana when the amount of money you need is enormous. Getting a personal loan from a financial institution will help you meet your financial commitments. Although you can use personal loans for multi-purposes as they could come in short term and long-term loans. In Ghana, most financial institutions offer long-term personal loans. The major difference in these loans include; terms, conditions, interest, and agreement. The meaning of long-term loans, features, requirements, pros and cons are in this article.
What is a long-term personal loan?
A long-term personal loan is an amount of money an individual borrows from a lender to solve personal needs. It becomes long term when the repayment options range from 5years to 15years. The term “long-term personal loans” is the period the borrower will pay back the loan. Long-term personal loans have a competitive interest. One interesting thing about long-term personal loans is that you can use it for any purpose.
Features of long-term personal loan in Ghana
Long-term personal loans have characteristics that are affordable. This motivates most people that engage with it. Few features of long-term personal loan in Ghana are:
- Loan amount is between GH¢500 to GH¢100,000.
- The duration of the loan is twelve to thirty-six months.
- Fixed monthly loan repayments.
- Quick and convenient loan processing.
- Immediate disbursement of the fund after successful application.
Requirements for long-term personal loan in Ghana
There are always criteria attached to each loan application. When applying for a loan is the last resort to your financial need. The requirements below make you eligible to get a long-term personal loan in Ghana. This serves as a solution to your financial need. Some requirements for long-term personal loan in Ghana are:
- Mandatory form.
- Two passport-sized photographs.
- Valid national identity card.
- A guarantor.
- They require evidence of permanent employment.
- Guarantor’s one passport size photograph.
- Valid national ID of guarantor.
Read also: How to apply for Long term loans in Ghana
What are the pros of long-term personal loan?
Long-term personal loan is beneficial in several ways. It can solve that long-term need while you pay back gradually for a longer time.
Some advantages of long-term loans are:
- A personal loan is very easy to process.
- It is a multi-purpose loan.
- Flexible repayment option.
- No collateral requirement in most cases.
- It satisfies various needs.
- Lower monthly payments.
- It has a lower interest rate.
- They can improve your credit.
- Long-term personal loan allows you to borrow more and merge more debts.
- You can use it for a major purchase.
What are the cons of taking a long-term personal loan?
The downsides that come with long-term personal loan in Ghana, include:
- High interest rates.
- Change in finance because of the long-term repayment.
- It requires collateral.
When can one get a long-term personal loan?
A long-term personal loan will make more sense for people who have good credit. You can get a long-term personal loan when you need to use the loan for expensive, but valuable, financial moves. Examples of these financial moves are: merging debt to save money, home improvement, hosting an event and so on. When your credit score is low, the cost of the loan may become so expensive.
A long-term loan is also ideal when you are borrowing a large sum of money and need a longer period to pay back.
How possible is it to get a long-term personal loan with bad credit?
Having a good credit rating helps you get better terms for a long-term personal loan. While prospective applicants for a personal loan should compare lender rates and terms. Having bad credit as a borrower can limit your eligibility. Bad credit can prevent one from qualifying for the low-interest that comes with long-term personal loan.
However, many financial institutions have specific credit score requirements. This makes borrowers with bad credit to find it difficult to find a financial institution or lender who will approve them.
Note: it is always advisable to go through the pre-approval process. This helps the borrower determine who will lend him/her and the cost, without affecting the credit score negatively.
Where to get a long-term personal loan
Many financial institutions in Ghana offer long-term personal loans. You can get long-term personal loans from Credit Union, Banks, Savings and Loan companies and alternative lenders in Ghana.
It is not wise to apply for a long-term personal loan with an unstable financial status. This is because your credit will suffer, but adequate and timely repayment of your loan will improve your credit score.
Before settling on a long-term personal loan, never forget that debt is a burden in your financial life. Any loan you get requires constant attention and constant payments until you complete it. However, a long-term loan will be more conducive than a short-term loan, because they stretch the repayment out. Alternatively, you can get a long-term business loan to expand your business.