Best 24 Month Loans Compared

Best Value 24 Month Loans

Here we have compared the cheapest / lowest APR% loans depending on your situation, credit history, and collateral.

Best 24 Month Loan to Buy a Car

Best 24 Month Loan to Consolidate Debt / Credit Cards

Best 24 Month Loan to Start a Business

A 24-month loan is a great alternative to credit cards or payday loans. 24-month loans are usually unsecured, range in size from around £1000 to £3000 and, despite the name, can have terms from one to two years.

How does a 24 Month Loan work?

A 24-month loan is repaid, plus interest, in two years or less. The amount borrowed is added to the interest, and the total is divided into the number of months. For example, if you borrowed £3000 for 24 months at 89% APR, your monthly payment would be £226.31. You would pay that amount, twenty-four times, and your repayment would be complete.

How much can you borrow with a 24 Month loan?

The amount available depends on several factors, but they are usually higher than payday loans or credit card limits, as they are designed to be repaid over a longer period.

A big factor is the amount of money you make. Another is your monthly expenditures. If you make considerably more than you spend each month, the lender will see that you can easily afford a higher payment, and will be willing to lend more money based on your ability to repay it. If you are running close to your income though, you will need to demonstrate a reasonable ability to repay the loan, or the lender is not allowed to lend to you.

Because 24 month loans are for a longer period than payday loans, make sure you have a plan for repayment that lasts the whole period – you don’t want to reach the end of an employment contract in six months and suddenly have no way to repay the debt.

Do you need to apply? Read First

The loan will cost you in interest and fees. Is it better to save up for the financial need, or is it a time-sensitive problem (like a repair or emergency)?

Once you have decided that you do need a loan, consider if you are able to get a loan from a cheaper source (such as friends or family, or a secured loan of some kind). This might be more flexible than a formal loan, and often comes without interest payments or fees.

Also take out only the amount you need. It may be tempting to get extra, but borrowing in this way is expensive, and the more you borrow, the more you pay in interest and fees. An item or service that you purchase using this kind of loan will actually cost you more than if you saved up for it, so only use this method for things you really need.

Consider what you can afford to pay each month. Don’t push your budget to the extreme if you don’t have to. Keep your monthly payments as low as you can, and in doing so you leave room for the unexpected. It might even be worthwhile to pay off your loan early if you manage to save up a little extra each month. This is a better position to be in than having to scramble each month to scrape together a too-high payment.

Finally, have a couple of payments set aside. Emergencies can happen – even when you are still recovering from a previous one – so it is a good idea to have a couple of months’ worth of payments in your savings. If you have a tough month, this money can prevent you from missing an instalment, and having to pay the fees for late payments. It can also protect your credit rating from damage caused by late or missing payments.

24 Month Loan FAQs

How can I use my 24 month loan if accepted?

You can use a 24 month loan for whatever you like. Because it is expensive, and has a longer term than most small loans, it is best if you use it for emergencies, and pay it off as quickly as possible. This will keep costs low, and decrease the chances of getting into trouble paying it back. The better your credit score, the more likely you are to get a good loan.

Common uses for 24 month loans include home and vehicle repairs, purchasing a used car, financing a wedding or other special event, or taking advantage of a limited time deal where the money saved makes the expense of the loan worthwhile.

How do I decide if 24 months is long enough?

The main factor in deciding this is the monthly amount you are able to pay. This is a balance between wanting to pay off the loan as quickly as possible – to reduce the costs of it – and wanting to keep the monthly payments low enough to work with your budget. Only you can make the final decision if a loan offer is something you can afford or not.

Missing payments is rare, but can be costly (reference).

Consider how stable your income and lifestyle are. If nothing is likely to change over the next two years, then a 24 month period may be a good idea. If you move often, change jobs, or work on a temporary contract basis, then it may better suit you to pay the loan off more quickly, reducing the risk of losing your income or having to take on extra expenses that were not considered when you set your loan amount.

How can I make sure I can afford the repayments?

The key to financial success isn’t making a lot of money, it’s planning ahead to make sure the money you have will be enough. Success in repaying your loan is the same. Plan ahead, and plan for changing circumstances.

Before you agree to a loan offer, set out your monthly expenses and income, and include a loan repayment. Consider that you should have some space between what you take in and what you spend, so that each month you gain a little money.

This will ensure long term financial stability, and allow for occasional emergencies, unexpected expenses, and will give you the option to treat yourself to something special now and then, without jeopardising your financial stability. It will also ensure that you will not damage your credit rating as you will be able to make your monthly repayment without incident.

Consider the calendar as well. Will you have extra expenses at some point in the year? Extra child care costs during the holidays? Money for Christmas and birthday presents? It can be hard to make a choice between important social obligations and making a loan payment, so avoid these tricky situations by factoring them in from the beginning.

Finally, since there is no predicting the future, and emergencies happen, it is a good idea to keep a few months’ worth of payments in your savings account. If something happens, and your income is lower than expected in a given month, or your expenses higher, you will be able to make your payments without incurring fees or penalties. Not to mention that it will be less stressful, and will not damage your credit rating. It is easy to imagine everything going well, but it is better to plan for a bump in the road now and then, and avoid disaster by being prepared.

You can see more about budgeting loans on the Gov website here: https://www.gov.uk/budgeting-help-benefits/repayments