The big external drives house a 3.5" drive, those will be your best bet. With USB 3.0, they are just as fast as internal drives. You will want to do your research and find the external drives that are still 7200 rpm with lots of cache 64mb or more.
I use a 2.5" western digital usb 3.0 drive, it is fast but it tapers off in performance.
The good thing here is that you know that it is not ideal. Also, games load most of their required files into RAM. The HDD is really only needed when loading scenes or maps. The exception would be Arma 3 and similar games that are so huge that they have to access the HDD somewhat often.
You are right to try and just go straight to an SSD, it will be worth it. I am all for the external drive as long as you understand that it is not ideal.