We've launched a brand new mobile app! Download it now. App Store Google Play


Long-term Loan alternatives

  • You could consider a credit card instead
  • Guaranteed credit limit
  • Check your eligibility with no impact to your credit score
Check my eligibility This won't affect your credit score

Representative example: Amount of credit £1,200. Interest rate: 49.0% pa (variable) Representative 49.0% APR (variable)

What is a long-term loan?

Taking out a long-term loan usually means borrowing money from a lender and paying it back over a period of more than 12 months. They work in much the same way as any other loan in that you repay via monthly instalments, typically with interest attached.

Long-term personal loans can help you cover larger expenses, such as a home renovation. They offer the benefit of lower interest rates and lower monthly repayments when compared to some short term loans. But the downside is that you could end up paying back more overall because you’re doing so over a longer period.

Dependent on your own circumstances, the 118 118 Money Simple Interest Rate Credit Card could be an alternative to a long-term loan. This does depend on what you need the loan for, the amount and of course, your own credit history.

If you require to borrow a large amount, then a loan may be a better option. If however it’s a relatively ‘small’ amount, then a credit card may offer alternative options to consider. Ultimately, make sure you do your own research when deciding what option is right for you.

Apply for a credit card from 118 118 Money with confidence
Use our eligibility check to find out what credit limit we’ll offer you before you apply, without affecting your credit rating!
Check my eligibility This won't affect your credit score
Why choose the 118 118 Money Simple Interest Rate Credit Card?

If you feel a credit card is a suitable option in comparison to a long-term personal loan, then here are just some of the benefits offered by the 118 118 Money Simple Interest Rate Credit Card.

A credit limit of up to £1,200.

Up to 51 days interest-free when you repay your balance in full each month.

You can repay in full or in instalments, as long as you make the minimum monthly repayment. We always recommend paying off more than that if you can.

As with our personal loan applications, you can apply for a credit card online and if successful, manage this through our app too.

You can check your eligibility without any impact on your credit rating.


Want to apply for a credit card?

  • Alternative to a payday loan
  • Check your eligibility with no impact on your credit score

Do I need a long-term personal loan?

A long-term loan could be the right option for you in a wide range of situations. For example, it could be suitable if you know you have a significant cost to cover, such as a new car or a major landscaping project. If you can’t afford to pay off that sort of money in one go, a long-term loan can help you to spread the cost over time and break it down into more manageable payments.

We offer loans of £1,000 to £5,000 to be repaid over a maximum of three years (missed or late repayments will incur a £12 charge). But as with any financial decision, you need to make sure it’s right for you before you apply for a long-term loan.

If you’re considering applying for a credit card, then bear in mind a credit card as an alternative can offer you some flexibility in terms of payments. Credit cards usually have a minimum monthly payment requirement, but you should always try and pay more than this if you can. If you keep up with your repayments then effectively you have access to a continuous line of credit. However, it’s also important to remember if you just pay the minimum payments on a credit card, the balance does accrue further interest. Unlike a personal loan, whether it’s a long-term or short term loan, you are over your agreed period after which the agreement ceases.

Some credit card providers also offer rewards with their cards, these can come in the form of loyalty rewards and suchlike. Typically, personal loans tend not to have any incentives associated with them. This can vary from lender to lender though.

Long-term loans vs credit cards

To give you an idea of some of the key differences between long-term loans and credit cards, we’ve put together this summary:



Credit Cards

Long-term Loans

Representative APR

Typically lower than short term loans

Typically higher than credit cards, but lower than short term loans


You can repay your balance in full, via a minimum monthly repayment or anything in between

Repayments are made via monthly instalments, although you may be able to increase those and pay off the loan early


A continuous line of credit, as long as it’s within the credit limit

The arrangement ends once you have repaid the loan in full plus the interest


Long-terms loans, credit cards and your credit history

Your credit file is what lenders will look to as a part of their credit check when assessing whether to offer you a loan or credit card. Using a credit reference agency, they can build a picture of what your credit history looks like. So if you’ve had multiple applications over a short period, had missed payments in the past or CCJs, all of this will be available as a part of a credit check.

Whatever your credit history is like will play a role in the decision if you’re eligible for either. A ‘bad credit history’ isn’t likely to make you more eligible for one over the other – a common misconception. Many think that a less than perfect credit history means you’re ineligible for a credit card. Some lenders, including 118 118 Money do consider applications from those with bad credit.

You can use our eligibility checker to see if you’re likely to be accepted for the 118 118 Money Simple Interest Rate Credit Card or not. You may be wondering why use this service; our eligibility checker can provide an indication of eligibility without completing a full credit check. If you’re searching for credit, as we said earlier, too many full applications over a short period of time can have a negative impact on your credit score. Our eligibility checker does not leave a footprint on your credit file. But remember, this is just an eligibility check, if you decide to apply thereafter, we will conduct a full credit check.

Is a long-term loan better than a credit card?

No, not necessarily. The purpose of the loan or credit card is more of an indicator of which can be better for your own circumstances. One type of credit may be more suitable to some and therefore ‘better’ than the other.

For example, you may want to improve your credit in which case a credit card designed to build credit may serve a better purpose than a long or short term loan. Alternatively, you may have a budget in mind for monthly repayments on large planned for borrowing such as home improvements or buying a car, in these instances a loan may be more suitable than a credit card.

You may be looking to potentially reduce your monthly payments by way of debt consolidation. If your debt is on a current card, then a balance transfer card may help you. Alternatively, there are debt consolidation loans you could consider instead. 

The features of each type of credit line can be vastly different. If the features of one are more suitable for your circumstances than the other, then this may be a better fit over the other. Make sure you always do your own research before making a decision.

Will an application affect my credit score?

Applying for any type of credit multiple times in a short period can negatively impact your score. So, it makes sense to do your research and choose your provider wisely. You can use our eligibility checker to see if you’ll be approved with us, and it’s a tool that won’t affect your credit rating.

If you are accepted for credit – whether that be for a long-term unsecured loan, a credit card or anything else – keeping up with the repayments can improve your score. It shows lenders that you are a reliable borrower, so it can work to your advantage. If you miss or are late with repayments, however, it could reflect negatively on your score.

Will you do a credit check when I apply?

Yes. All applications for credit cards or long-term loans in the UK are subject to a credit check. If you apply with us, we’ll carry out a check to help us make a decision on your application. Before you begin, you can always check your credit report; we recommend our free eligibility tool, which won’t affect your score.

What if I have questions?

If you’re weighing up whether to apply for a long-term loan or a credit card and have some questions on our products, we can help. Just get in touch with our Customer Services team or call us on 02920 548 118. Lines are open from:

8am – 7pm Monday to Saturday
9am – 5pm Bank holidays
Closed – Sundays

Alternatively you can use our web or app chat service.

Apply for a payday loan alternative from 118 118 Money

Want to apply for a credit card with 118 118 Money? You can try our eligibility check first to see if you’ll be accepted before you apply – and it won’t affect your credit rating.

Read what our customers think about us

Long Term Loan Alternative FAQs

With us, you can apply for a long-term of £1,000 to £5,000 to be repaid over a maximum of three years. You can use our loan eligibility checker to give you an idea of whether you’ll be approved before you start. To qualify, you’ll need to be:

  • A UK resident
  • Aged between 18 and 70
  • The owner of a current UK bank account and debit card
  • Earning a monthly net income of more than £1,000
  • Employed or self-employed

And you’ll have to provide us with your:

  • Mobile phone number
  • Email address
  • Home address
  • Employment history
  • Net monthly income
  • Outgoings
  • Bank details



Yes, all our loans are unsecured. That means you never have to put up any assets – such as your home or car – as collateral in case you cannot make the repayments.

When you apply for a long-term loan, a poor credit history doesn’t have to mean you won’t be accepted. When we review your application, we’ll look at lots of other factors, including whether you’re on the electoral register or whether you have any CCJs against your name. So, while we can never guarantee you’ll be approved without knowing your financial situation, rest assured we do offer loans for bad credit and do consider applications from those with a less-than-perfect credit history.

Yes. A guarantor is someone who guarantees to make the repayments on your loan if, for whatever reason, you are unable to. This is usually a close friend or family member. We do not require you to provide this guarantee, so if you meet our eligibility criteria it may be possible for you to take out a long-term loan for bad credit with no guarantor.

That can depend. For example, the monthly repayments on a long-term loan are likely to be lower. However, because you’re paying back over an extended period of time, the overall cost could end up higher than a short term loan.


Ready to apply for a credit card from 118 118 Money?

You can try our eligibility check first to see if you’ll be accepted before you apply – and it won’t affect your credit rating.