Two Types of Long-Term Loans
Two forms of long-term loans exist. They are the secured and the unsecured loan.
One: The Secured Long-Term Personal Loan
A borrower can land the large amount of a long-term personal loan by using a valuable asset to hand over to the lender as collateral or security. These can be: car, house, stocks and bonds, or other real estate, etc. When it comes to paying back the loan, this can be a time-frame of 5-25 years. Since the payback time is so long, the lender can help the borrower reduce the monthly payment. Once the loan reaches maturity, the borrower can get the collateral or security back after the loan is paid off.
Two: The Unsecured Long-Term Personal Loan
Since these long-term personal loans do not require collateral or security, they are called unsecured personal loans. Of course, these unsecured loans help boost credit histories as long as the payments are made on time and in full as the loan contract specifies. Unsecured loans cost quite a bit more in interest rates charged because they are unsecured. Which makes sense since the lender has no secured property to sell if the loan is unsecured. The amount of these loans can range from $1000 to $25000.