The term of a loan not only determines how much the monthly installments will be. It also decides how much interest to pay for the loan. After all, they come up every month. And the longer the term, the more interest must be paid.
A 120-month loan is a loan that is taken relatively frequently. Because a repayment over 10 years is completely normal for medium loan amounts between 10,000 and 30,000 euros. Despite all this, there are some things to keep in mind when opting for a 120-month loan. You can find out what this is here.
Which type of loan is worthwhile as a loan with a term of 120 months?
In principle, you can use any type of loan as a 120-month loan. Whether it is a rather small real estate loan, an installment loan, consumer credit, car loan or call-off credit – each type of loan is suitable as a loan with a term of 120 months and can be adjusted accordingly.
More interesting is therefore the question, which loan amount you want to combine to this long term. After all, it is not just about using the money from the loan to implement a planned project. It’s also about getting the loan back to the bank in the end. And this can only succeed if the monthly burden is not so high that it puts you in financial trouble.
How can such a loan be secured?
When you take out a loan with such a long term, it is important that you secure it in all directions. On the one hand you do this with your hopefully good credit rating. On the other hand, you should also try to activate additional collateral in order to minimize the risk of default.
So it may be that the bank demands of you a guarantor. Or, she will recommend you to take out a residual debt insurance or a term life insurance. Always remember that you do not necessarily have to follow these recommendations. However, these improve the chance of a loan with low interest rates and good repayment modalities. And that’s what it should ultimately be, what counts in the end.
What should you pay attention to when recording?
Keep in mind that if you have a 120-month loan, be sure to insist on free special repayments and early repayment. Otherwise, you will not be able to repatriate the loan during the term. Rescheduling can always make sense when the conditions for borrowing have improved and you can save money.
Therefore always make sure that a corresponding regulation has been made in the credit agreement. Otherwise, it can be very expensive if you want to take advantage of cheaper deals.
Incidentally, many banks and savings banks have already included this clause in the contract, without which they must point out this. However, check here how high the special payments are and how often they are allowed. Because even this always decides whether it is a good or a less good credit offer.