Our Pick Of The Best 10 Year Loans
Taking a loan over 10 years can be an efficient way of keeping the cost of monthly repayments down. This can be especially helpful when borrowing a larger sum of money, such as for home improvements or debt consolidation.
But, while it can be possible to find an unsecured ‘personal’ loan with a 10-year term, they are usually capped at five or seven years, so the choice is much more limited. Most loans taken out over a longer timeframe will usually be secured loans.
With a secured loan, sometimes called a homeowner loan, the borrower must put up some security against the borrowing – usually their home. For this reason, secured loans are more risky than unsecured loans and your home is at risk if you cannot meet the repayments.
What are the best 10-year loans?
We carried out some research (April 2024) to identify what we consider to be the best secured loan providers with a 10-year term. For more about how the deals are ranked, refer to our Methodology, below.
Pepper Money
Starting interest rate
6.71% (5-year fix) 7.71% (2-year fix)
Product fee
£595
Early repayment charge
Yes
Representative Example
If you borrow £30,000 over 180 months, you would pay interest rate fixed at 6.71% (fixed) for 60 months followed by 120 months at the lender’s reversionary rate at 9.36% (variable). Fees: broker fee is £1,770 and lender fee is £595. Overall cost of comparison 9.39% APRC.
Starting interest rate
6.71% (5-year fix) 7.71% (2-year fix)
Product fee
£595
Early repayment charge
Yes
Representative Example
If you borrow £30,000 over 180 months, you would pay interest rate fixed at 6.71% (fixed) for 60 months followed by 120 months at the lender’s reversionary rate at 9.36% (variable). Fees: broker fee is £1,770 and lender fee is £595. Overall cost of comparison 9.39% APRC.
Pepper Money offers a choice of competitive variable, discounted and fixed rate secured loans, available direct or through a broker.
Loan amounts vary from £5,000 to £1 million over a term of 3-30 years. There is no minimum income threshold and the minimum property value is £100,000. The maximum loan to value ratio is 85%. But the lender’s best rates (including those quoted here, are for borrowers with at least 65% LTV and a strong credit score).
In addition to the product fee, customers will pay a £95 discharge fee but no valuation fee. They will also have to pay any applicable broker’s fee. Loan.co.uk’s fee is £1,770.
There is no charge for making overpayments and overpayments are unlimited. But paying the loan off early in full will incur an early repayment charge.
Overall, Pepper Money offers one of the lowest interest rates and highest maximum loan amounts and its loan arrangement fees are lower than many competitors.
- Among the lowest fixed interest rates
- High maximum loan amount
- Unlimited overpayments
- No minimum income requirement
- Product fee and broker fees
- Early repayment charges apply
United Trust Bank
Starting interest rate
6.59% (5-year fixed) 7.29% (2-year fixed)
Product fee
£995
Early repayment charge
Yes
Representative Example
If you borrow £30,000 over 180 months, you would pay interest rate fixed at 6.59% (fixed) for 60 months followed by 120 months at the lender’s reversionary rate at 10.25% (variable). Fees: broker fee is £1,770 and lender fee is £995. Overall cost of comparison 9.84% APRC.
Starting interest rate
6.59% (5-year fixed) 7.29% (2-year fixed)
Product fee
£995
Early repayment charge
Yes
Representative Example
If you borrow £30,000 over 180 months, you would pay interest rate fixed at 6.59% (fixed) for 60 months followed by 120 months at the lender’s reversionary rate at 10.25% (variable). Fees: broker fee is £1,770 and lender fee is £995. Overall cost of comparison 9.84% APRC.
United Trust Bank offers a choice of variable and fixed rate loans, available only through a broker. While its fixed rates are lower than some competitors in the market its reversionary rate (the rate borrowers default to after the fixed rate period) and the arrangement fee is higher. This means it has a higher APRC than some competitors over a 15 year loan term.
Loan amounts vary from £10,000 to £500,000 over a term of 3 to 35 years. There is a minimum income threshold of £15,000 and the minimum property value is £100,000. Maximum loan to value ratio permitted is 85% LTV. For the fixed rates quoted here customers will need at least 65% LTV in their property and a strong credit score.
Customers will typically not be charged a valuation fee but will usually have to pay any applicable broker’s fee. Loan.co.uk’s fee for a £30,000 loan would be £1,770 for example.
There is no charge for making overpayments of up to 10% per year, but paying the loan off early in full may incur a fee if it is within a fixed rate period. There is no early repayment charge beyond this fixed rate period.
Overall, United Trust Bank offers a relatively competitive product fee along with a low minimum income requirement and low set up fees.
- Low initial fixed rate
- Low minimum income requirement
- Only allows fee-free overpayments of 10%
West One
Starting interest rate
6.89% (5-year fix) 7.39% (2-year fix)
Product fee
£995
Early repayment charge
Yes
Representative Example
If you borrow £30,000 over 180 months, you would pay interest rate fixed at 6.89% (fixed) for 60 months followed by 120 months at the lender’s reversionary rate at 10.49% (variable). Fees: broker fee is £1,770 and lender fee is £995. Overall cost of comparison 10.22% APRC.
Starting interest rate
6.89% (5-year fix) 7.39% (2-year fix)
Product fee
£995
Early repayment charge
Yes
Representative Example
If you borrow £30,000 over 180 months, you would pay interest rate fixed at 6.89% (fixed) for 60 months followed by 120 months at the lender’s reversionary rate at 10.49% (variable). Fees: broker fee is £1,770 and lender fee is £995. Overall cost of comparison 10.22% APRC.
West One offers a range of variable and fixed rate loans at competitive rates and with a low set up fee. As an intermediary-only lender you’re likely to have to pay a broker fee for your loan however.
Loans are available up to £500,000 over terms of between three and 35 years, typically up to 85% LTV, although the lender’s lowest rates are reserved for those with at least 65% LTV in their property. The arrangement fee on a £30,000 loan is £995. Borrowers will also pay a £90 exit or discharge fee at the end of their loan.
Early repayment charges apply on fixed rate loans but overpayments of up to 10% are permitted each year. Interest-only loan options may be available to eligible borrowers.
- Competitive interest rates
- Interest only options
- Higher interest rates than some best buys
- Only allows penalty-free overpayments of 10%
Selina Finance
Starting interest rate
7.6% (5 year fix) 8.0% (2-year fix)
Product fee
£995
Early repayment charge
Yes
Representative Example
If you borrow £30,000 over 180 months, you would pay interest rate fixed at 7.6% (fixed) for 60 months followed by 120 months at the lender’s reversionary rate at 8.75% (variable). Fees: broker fee is £1,770 and lender fee is £995. Overall cost of comparison 9.94% APRC.
Starting interest rate
7.6% (5 year fix) 8.0% (2-year fix)
Product fee
£995
Early repayment charge
Yes
Representative Example
If you borrow £30,000 over 180 months, you would pay interest rate fixed at 7.6% (fixed) for 60 months followed by 120 months at the lender’s reversionary rate at 8.75% (variable). Fees: broker fee is £1,770 and lender fee is £995. Overall cost of comparison 9.94% APRC.
Selina Finance offers competitive fixed rates on its homeowner loan either direct or through brokers. You can borrow from £10k up to £250k over terms from 5 to 30 years. The maximum loan to value is 85%.
To get the fixed rate deals quoted here borrowers will need at least 60% equity in their property.
Although customers will pay a product fee, there is typically no valuation fee and Selina does not charge a discharge/exit fee at the end of the loan. There is no charge for making overpayments of up to 10% per year, but charges will apply on full early repayment.
Selina also offers an innovative Home Equity Line Of Credit (HELOC) variable rate secured loan. Loan amounts vary from £10,000 to £1 million over a term of 5-30 years. Selina’s product offers a drawdown option, whereby customers can draw down the money as and when they need it in the first five years (subject to the overall credit limit). At the end of the five years, the loan amount is fixed at the amount drawn-down.
- Draw down option available with some Selina loans
- Borrow up to £1 million (subject to eligibility)
- Overpayments up to 10% per year
- Slightly higher interest rates
- Minimum income requirement of £22,500
Methodology
We use data from our secured loans partner, online broker Loan.co.uk, which works with secured loan providers from across the market.
To arrive at our star ratings we considered the following:
- Interest rate: based on the lowest interest rates quoted. The actual interest rate charged will depend on the individual’s personal circumstances, including their loan-to-value ratio, income and credit score, among other factors
- Fees: including product fees, valuation fees and discharge or exit fees (charged on the repayment of the loan)
- Repayment terms: the minimum and maximum repayment periods and loan values, plus the early repayment charges
- Other factors: we also considered other differentiating factors such as the ability to make overpayments, flexible loan draw down options and low minimum income thresholds.
What is a 10-year loan?
A 10-year loan refers to the duration (known as ‘the term’) over which the loan is borrowed.
With a 10-year secured loan, the borrower can usually choose whether to opt for a fixed interest rate (sometimes this might only apply for the first few years of the loan, such as a two-year, three-year or five-year fixed rate) or a variable rate.
After the fixed rate period ends the borrower will be moved onto the lenders’ variable rate (sometimes called the reversionary rate).
Borrowers make monthly repayments – including capital and interest – until the loan is repaid in full a decade down the line.
Pros and cons of a 10-year loan
There are a number of factors to consider before taking out a secured loan over 10 years.
Pros
- A longer term loan can mean lower monthly repayments
- It can sometimes be easier to get a secured loan at lower interest rates compared to an unsecured loan, particularly for borrowers with lower credit scores
- There may be more choice of 10-year loans in the secured loan market, compared to unsecured loans.
Cons
- With a secured loan the borrower’s home is at risk if repayments are missed
- Borrowers pay more interest overall with longer term loans
- There are usually set-up fees on secured loans
- If you take an initial fixed rate you are likely to be moved on to a much higher variable reversionary rate after the fixed rate term ends
- Penalty fees are likely to apply if you want to repay the loan early.
Borrowing amounts on a 10-year loan
How much someone can borrow over 10 years will be down to personal circumstances, such as income and credit score. Different lenders take a different view on how much they will lend to someone – and at what interest rate.
Generally speaking it may be possible to borrow more on a secured loan, compared to an unsecured loan. This is because the lender has the added security attached to the lending in the form of the borrower’s asset – their home.
Among the lenders we have listed above, it is possible to borrow between £5,000 and £1 million on a secured loan.
Searching for a loan with a broker, such as our partner Loan.co.uk, means borrowers can see what deals are available and compare rates before applying, all without affecting their credit score.
What are the alternatives to a 10-year secured loan?
For borrowers, secured loans are higher risk than unsecured loans. That’s because if they are unable to keep up with repayments, they could lose their home. So it’s vital to consider the possible alternatives to secured loans before making a decision. Some alternative ways to borrow over 10 years include the following.
Remortgaging
Depending on the cost of any early repayment charges, it may be cheaper to remortgage to increase your home loan to cover the total amount you’re looking to borrow, rather than taking out a secured loan on top of your existing mortgage.
Unsecured personal loan
Personal loans lend between £1,000 and £25,000 with some lenders offering larger loan amounts of up to £35,000. The main advantage is that loans won’t be secured against the borrower’s home. Personal loan terms are usually up to five years, although some can be longer.
0% credit cards
There are different types of credit card on the market that offer zero interest for a time, such as 0% purchase credit card and 0% balance transfer cards.
The most competitive deals offer 0% interest for up to two years and sometimes longer.
But when the offer period comes to an end, borrowers need to switch the balance to a new 0% card or risk paying the card provider’s much higher APR.
While credit cards can offer a flexible and low cost way to borrow they may not suit long-term borrowing. Card providers will also set the spending limit, which will depend on the cardholder’s income and credit score.
Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners.
