Six- and Seven-Year Personal Loans

What 72 and 84 months cost at common amounts

The table gives the monthly payment and, in brackets, the total interest. It assumes a fixed rate, equal monthly payments and no fees. These are worked examples, not offers. Long terms are mostly offered on larger amounts, so the table starts at $20,000.

Over seven years the rate is decisive. On $40,000, the difference between 12% and 18% APR is about $135 a month and more than $11,300 of interest. Run your own offers in the payment by loan size calculator.

The total-cost trap

Each added year lowers the payment by less and adds about as much interest as the one before. Here is $40,000 at 12% APR, with the rate held equal across terms.

From 60 months to 84, the payment falls by $183.67 and the interest rises by $5,926.51: about $32 of interest for each dollar of monthly relief. The last step alone, from 72 to 84 months, saves $75.90 a month and costs $3,008.63 more.

Lenders also tend to charge more for the longest terms. If the same lender offered 11% over 60 months or 13% over 84, the seven-year loan would cost $727.68 a month and $21,125.00 in interest, against $869.70 and $12,181.82. That is about $142 less a month for about $8,943 more in total. The loan term comparison lays out every length for your amount.

Seven rings: what you still owe

You pay about $8,473 a year. In the first ring, 54.2% of it is interest, and the balance falls by less than $3,900. After three years you still owe two thirds of what you borrowed. After five years you owe $15,000.15, with 24 payments, about $16,947, still to make.

72 or 84 months?

If a lender offers both, the six-year term is often the better compromise. On the $40,000 example at 12%, 72 months costs $75.90 more a month than 84 and saves $3,008.63 of interest, and the debt is gone a full year sooner. After five years of the 72-month loan you owe $8,801.56, against $15,000.15 on the 84-month loan. If $782 a month fits your budget with some room left, the shorter of the two long terms is usually worth it. If only $706 fits, the amount itself deserves a second look before the term does.

Will what you finance outlast the loan?

The test for any long term is simple: the thing you pay for should still be useful when the last payment clears. Seven years is long enough that many purposes fail it.

If the purpose fails the test, a shorter term with a smaller amount is the safer plan. If the payment only works at seven years, the amount may be too large for your budget. How much to borrow starts from what you actually need.

Who offers 72- and 84-month loans

Fewer lenders go this far. Some banks stop at 60 months. Some online lenders advertise terms up to 84 months, and say the terms they offer depend on your credit, the loan amount and other factors. Lenders that do offer six or seven years often keep them for larger loans and applicants with strong credit and steady income. Expect a minimum amount for the longest terms, and a choice of shorter terms only on a small loan.

For large home projects, compare the long personal loan with borrowing against your home, which has its own risks: your house secures the debt. TrustCedar compares a personal loan and a HELOC, and our $50,000 loan page works through a size where this term often comes up.

If you take a seven-year loan

1. 1 Read the finance charge and the total of payments. The Truth in Lending disclosure shows both; set them against a 60-month offer before you choose.
2. 2 Confirm there is no prepayment penalty. The long term is safest as a floor you can pay ahead of.
3. 3 Pay extra early. Interest is heaviest in the first rings, so extra payments in years one to three save the most.
4. 4 Plan for the next loan. The payment will count against your debt-to-income ratio for years. A second personal loan explains what lenders look at.

Questions people ask