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Loan for 120 months


When taking out a loan, the term is a particularly important feature. The following article deals with loans with a maturity of 120 months, exactly 10 years. Loans over such a period are considered long-term and therefore often have a high loan amount.

Which different types of credit are available?

Which different types of credit are available?

In the world of finance one has to differentiate between a personal loan and a bank loan. A personal loan is a loan granted either by individuals or by a company. These are often provided with low interest rates and are therefore very attractive to the applicant. However, a bank loan is the common variant in Germany.

Banks are much easier to loan but usually have higher interest rates. The credit institutions closely examine the finances of the applicants and then make an offer. Of course, for the applicant, the annual percentage rate of charge is of particular importance.

Who can get a loan for 120 months?

In principle, any private person over the age of 18 and any company can apply for a loan over 120 months. The credit institution then checks the creditworthiness, ie the age, income and collateral of the applicant.

It is of course important for the bank that the applicant is liquid. In the event of insolvency, the bank would remain on the costs. Due to this risk, an interest rate is charged.

Benefits of a loan over 120 months

With a loan over 120 months there are advantages for the borrower and the lender. The lender can expect a fixed income over the next 10 years. Due to the relatively long term, the total return for the lender is relatively high. However, the long term increases the risk for the bank.

The borrower can take a higher loan amount through the long term, without the monthly fees are priceless. This allows you to afford large investments, such as a home or a condominium.

What influences the interest rate?

The interest rate is usually influenced by the maturity. A loan that runs for 120 months therefore has more attractive annual interest rates than a 36-month loan. In addition, the risk to the bank influences the interest rate, and affluent people receive lower interest rates than poorer people because the lender’s risk is less.

Are there different types of financing?

Yes, in today’s financial world, there are various ways to finance a loan. The most common way is to pay down a monthly amount and thus reduce the loan amount. Depending on the agreement, this amount may also be paid quarterly, half-yearly or full-year. In some loan agreements so-called special repayments are agreed. With these special repayments, the borrower can pay off up to ten percent of the loan amount.

However, this is only possible once a year and in addition to the monthly installments. If the borrower regularly recognizes this special repayment, it reduces the interest cost of the entire loan because it pays off the sum faster. This would also reduce the runtime.

If you take out a loan, you have to decide not only on the loan amount but above all on the right term. Especially with higher loan amounts, a long-term period is usually recommended for the repayment. A significantly reduced monthly rate is probably the biggest advantage.

Requirements for obtaining a loan over 120 months

An application for a loan of more than 120 months can in principle be made by any person who is at least 18 years old – ie of legal age. As part of the application, the creditworthiness of the borrower is queried by the corresponding bank at the private credit.

Credit rating is the applicant’s creditworthiness. This includes criteria such as age, income and any collateral. If the borrower may not be sufficiently liquid, the risk of payment default increases.

For the banks, a positive credit check is therefore a fixed factor for risk minimization and is a basic requirement for the customer to obtain the desired loan.

Step by step to the desired loan

Step by step to the desired loan

First of all, there is no fundamental difference in terms of the application process or the credit requirements compared to loans with a shorter repayment period for a loan over a period of 10 years.

Regardless of whether the loan is requested from the house bank or conveniently via the Internet: The process until the award is basically the same: After the decision has been made for the right provider, processing is carried out according to the Bank’s specifications via a suitable application form. For this purpose, personal data as well as information on the financial situation are recorded. In addition, information on the desired loan, such as net loan amount and duration.

The bank reviews the application and, if it has the appropriate credit rating, approves the required credit.

What is to be considered?

The possibility of extensive research – especially on relevant comparison portals – should be used intensively in advance. Especially with a long maturity, the interest rate depends on the underlying conditions.

Terms such as effective interest rate, special repayment, prepayment penalty or installment break should therefore not be foreign words for a loan over 10 years and be taken into account in the individual planning in any case.

interest rate

First of all, the term has a significant impact on the interest rate. A loan with a term of 120 months thus offers fundamentally more attractive terms than, for example, a 48-month loan. Another factor is the risk associated with lending. For example, wealthier borrowers often receive a lower interest rate than people whose credit rating is relatively poorer.

Interest is not equal to interest. Decisive for the total costs incurred at the end of the term is the annual percentage rate of charge. This is composed not only of the actual interest but also from any other fees. Thus, it should be noted that the lower the annual percentage rate, the less the cost of the credit in the grand total.

Special repayment / early replacement

Nobody knows how your own life and the associated financial situation develops. It does not make sense whether unexpected blessings or salary improvements: It makes sense, for example, to install the option of early repayment without prepayment penalty as an integral part of the contract. Because especially with a complete transfer before the end of the regular term without corresponding clauses quickly high fees or transfer costs incurred.

Another expedient option is to agree special repayment: these payments, which are generally possible once a year and may not exceed 10% of the loan amount, can significantly reduce the term and thus reduce interest costs.

rate pause

In order to be prepared for a financially difficult situation, it should be checked in advance whether the selected bank will allow the customer installment breaks. Regardless of whether a major repair of the car is pending or the cash register threatens to become cluttered at Christmas: With the option to suspend one or two installments a year, the ability to act remains guaranteed.

But attention:
If there is the possibility of two payment pauses per year, most banks require at least three installments to be paid between these interruptions.

Application procedure made easy

The financial world is changing very fast. The same applies to the application modalities for a term of 120 months. Thus, it is not surprising that more and more banks prefer a digital application process. Ideally, the bank uses the Video Ident procedure. Instead of the Post Ident procedure, the entire process can be carried out so conveniently and safely from home. The customer hereby grants the bank one-time access to his account.

The advantages are obvious: the mailing of salary statements or account statements is no longer necessary. In addition, the electronic signature also replaces a printout and sending of the loan application.

Thus, the digital loan application not only offers more comfort, but also shortens the processing time enormously.

Additional advantages

With a loan with a term of 120 months, there are advantages for all involved: The long repayment phase and a corresponding lower monthly burden, the borrower has the opportunity to take a larger amount. Large investments, such as for the condominium, the new car or the modernization of home ownership, are thus quite feasible.

On the other hand, the lender can count on a fixed income and an associated lucrative return over the entire term. The fact that the risk increases with a longer term is of importance to the bank, but it is entirely acceptable as a whole.


Especially with a loan with a long term it depends on the right selection. It is not only important to keep an eye on the interest rate, but also to harmonize the framework conditions with your own needs.

Anyone picking up their loan in the currently very low-interest-rate phase will therefore be able to enjoy comfortable and above all realizable monthly installments over a long period of 120 months.

Comparison and research save the borrower unpleasant surprises and can help bring about a favorable, solid and above all future-proof financing on the way.

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