A loan with a term of 240 months is not a problem if certain purpose restrictions are agreed upon. An installment loan with a term of 240 months for private customers without a specific purpose for free use is a real problem.
If you are looking for a freely usable loan with a term of 20 years, you will only find it online if you belong to certain professional groups. Perhaps you are luckier with your house bank. But that is also very unlikely with installment loans for free use.
The chances are better with loans for business purposes, which are sometimes made possible with loan terms of 20 years.
Read why banks are so reluctant to grant loans with very long terms and which professional groups you have to belong to in order to still get a loan with a term of 240 months. And finally: Which provider on the Internet can you find loans with a 20-year term?
Installment loan 240 months term: a problem for banks
Banks grant a number of loan options to different groups of people.
The installment loan is one of them. This type of loan is characterized by certain rules that are beneficial for both borrowers and banks and are acceptable.
The most important rule: All loan terms are fixed from the outset. This applies to ancillary agreements such as special repayments, total redemption, and installment suspensions. But this is especially true for repayments and interest. Without the consent of the contracting parties, these key points cannot be changed during the credit period.
This is an advantage for the borrower, who knows the burden on the debt service from the outset.
In the case of installment loans that are freely available, only certain types of security are generally required. In most cases, a silent assignment of wages is enough. Banks do not like to accept other types of collateral because installment loans are mass transactions that are particularly worthwhile for direct banks if they are not too complicated to process.
Under these premises, very long maturities mean a risk that is twice as high for banks: A higher risk of refinancing. An additional credit default risk, because it is difficult to predict creditworthiness with very long terms.
There are two limitations to the nature of this direct bank loan option. Once the loan amount is limited. Often no more than 50,000 dollars are possible. On the other hand, the duration of the term is limited. For most banks, it is no more than 96 months. With longer maturities over 60 months, the banks additionally hedge themselves. On average, more interest is required.
Only a few banks, such as Good Credit Bank, grant installment loans to private individuals who go beyond the scope just described. Good Credit Bank, for example, issues loan amounts of up to USD 100,000 with terms of up to 120 months.
Good Credit Bank and other banks that accept long terms of up to 120 months are included in the loan calculator we recommend.
If you can also live with terms of up to 120 months and with installment loans of up to USD 100,000, we recommend using this loan comparison free of charge and without obligation.
Otherwise, it depends on whether you belong to a professional group for which certain loan variants for loans to private individuals without a specific purpose are offered with a term of 240 months.
Official loans and official loans: Eligible professional groups
Official loans and so-called official loans can be applied for by all employees in the public service. Depending on the provider, public sector employees have to wait a few years before they are eligible to apply.
Some providers also accept other professional groups. This includes, for example, employees in academic professions or in management positions.
A secure job situation and a good income are required. It is regularly expected that the employment relationship has existed for a few years when the loan is requested. The standard is probably five years.
As a rule, loans with excessively long terms are only sought when the loan amounts are high. Civil servant loans or civil servant loans on average allow loan amounts of 20 to 25 times a month’s salary. The loan amounts can therefore significantly exceed the limit of USD 50,000 that is usual for installment loans.
However, all existing credit obligations must be replaced by the official loan taken out. An exception is real estate financing, which can remain in addition to the official loan.
A distinction is made between two variants. In one variant, conventional installment loans are granted. This variant is often called an official loan. The peculiarity lies in the very favorable effective annual interest rate and the possibility of high loan amounts. But the term is usually no longer than ten years or 120 months. A period of 240 months is usually not possible.
Another variant consists of a final loan, which is concluded together with a repayment vehicle. This variant is often referred to as a civil servant loan or real civil servant loan. Mostly it is a life insurance or pension insurance. Savings plans on securities are also possible.
At the end of the term, the loan is repaid from the repayment vehicle by the maturity payment. Only interest has to be paid during the term, however, for the entire amount during the entire period. The monthly installment is made up of the interest payments on the total amount and on the contributions for the principal.
These loans are cheap during the loan period. Another question is whether a calculation of the total costs leads to the same result. Official loans are possible with terms of 240 months and can also be concluded online.
For example, they are used by the credit intermediary offered. The financial service provider arranges both government loans and government loans.
The maximum loan amount is generally given as 100,000 dollars. Higher amounts can be requested after contacting us beforehand.
Real estate loans as general-purpose loans
Mostly loans for which a land charge or a mortgage are entered in the land register are granted for the purpose of financing a property.
For some time now, however, financial service providers have also offered mortgage loans as general-purpose loans that can be used by the borrower as desired. One example is Good Credit’s mortgage loan.
The prerequisite is that you own an owner-occupied property or want to purchase one. The terms can be chosen to be very long. 30 years, 360 months are possible. In this respect, a loan with a term of 240 months is not a problem.
The maximum loan amount is given as 300,000 dollars. The mortgage loan is also subordinated. Apart from the entry in the land register, the borrower has the same advantages as this loan variant as with an installment loan. Redemption, interest, and term are fixed from the outset.