Especially when larger purchases are due, it is often necessary to finance them with a loan. The higher the amount needed, the greater the financial burden of the monthly installments. To keep this within limits, an installment loan with a term of 120 months is recommended. However, not all banks offer such long maturities. Therefore, it is first necessary to use a credit calculator to find out from which banks an installment loan with a term of 120 months is even possible.
Advantages of the online loan calculator
The loan calculator is able to compare the offers of a large number of banks within seconds. Since you can also enter the term in addition to the required amount, only the banks that also offer an installment loan with a term of 120 months are shown for the required loan amount. In addition, you can see directly what the monthly rate is and the total amount that has to be paid back to the bank. Once you have decided on a particular provider, you can switch directly via the link on their website to apply for the loan online.
This means an enormous saving of time, since the loan contract can usually be printed out immediately after receiving the immediate approval. All you have to do is sign the contract and send it to the bank with the required documents. After a final credit check, the borrower receives a final commitment and the loan amount is transferred to the borrower’s account.
Higher costs for an installment loan with a term of 120 months
Borrowers who take out an installment loan with a term of 120 months should be aware that this involves higher costs than a comparable loan with a shorter term. The reason is the higher default risk that an installment loan has a term of 120 months. The longer the term, the greater the risk that the borrower will experience payment difficulties due to unforeseen events. Banks hedge this higher risk with a correspondingly high interest rate.
What is still important with an installment loan with a term of 120 months
Especially with long terms, borrowers should make sure that they can make special repayments at any time free of charge. In this way, the loan can be repaid quickly under certain circumstances and thus save costs. If a higher income is available to the borrower during the term, for example due to a change of job, the installment loan can also be adapted to the new circumstances with a term of 120 months.
Most banks offer the option to adjust the term later. With a long term, you should also think about residual debt insurance. This can be used to cover a number of unforeseen events such as a long illness, inability to work or unemployment that is not your fault.