Compare 12 Month Loans

A Guide To 12 Month Loans – Getting The Best Deal

A 12-month loan makes it easier for individuals to access funds regardless of a bad credit record. Lenders can provide funds as part of a secured or unsecured loan.

Applicants with a poor credit history are given an opportunity to invite a guarantor, thus significantly improving chances of credit approval. It is possible to apply for a 12-month loan via the internet thereby eliminating hassles.

The concept originated in the United States and the United Kingdom. The loans are also referred to as payday loans and applicants can receive funds within 24 hours.

This allows individuals to deal with emergencies requiring a substantial amount of money. The repayments are typically spread over 12 months, which mitigates the burden on the borrower.

Repaying the debt as scheduled makes it easier for borrowers to improve their credit record. Non-payment, on the other hand, can affect the borrower’s credit rating.

If a guarantor co-signed the loan, they will be required to make payments on behalf of the debtor. It is possible for the guarantor to lose personal belongings if the debt is secured.

What Are The Key Features Of 12-Month Loans?

  • The loan amount can range between £100 and £5,000 depending on the lender
  • Repayable in 12 months
  • Lenders can accept applications from borrowers with bad credit history
  • The approval period is relatively short and the process can be handled online
  • No credit checks
  • Available to individuals above the age of 18 with a regular income
  • No fees for missed payments or early repayment

Upon approval of the loan, the funds are deposited directly into the borrower’s bank account. The majority of payday loans are repaid in 12 equal monthly payments but the borrower can make specific arrangements with the lender.

Key Benefits Of 12-Month Payday Loans

Borrowers can take advantage of these loans to bridge a gap following an unexpected event that requires additional funds. The loan amount is disbursed quickly allowing applicants to cover emergency expenses immediately.

Anyone with a regular income can gain easy access to the loans via Finance.co.uk’s comparison tables. Simply choose the best offer which suits your needs.

Many direct lenders offer great deals on the loans through significantly lower interest rates when compared to other types of personal loans.

When it comes to repayments, the lender does not automatically withdraw funds from the borrower’s bank account. This enables borrowers to repay the loan at a comfortable pace.

The popularity of the 12-month loans can be attributed to the various incentives offered by UK direct lenders. In most cases, the loan agreements require no guarantor.

Credit unions, banks, and other financial services companies typically offer installment and credit card loans that come with varying repayment periods.

The duration ranges from 12 to 36 months. However, qualifying for a bank loan can be difficult, especially for borrowers with a poor credit history.

The loan application process for bank loans takes a considerable time and applicants are expected to submit a wide variety of paperwork.

This in contrast to the paperless application processes associated with 12-month loans. Credit unions and banks often demand collateral or the involvement of a guarantor when a loan applicant has a poor credit rating.

Finding The Best Loan Deals

Applying for a 12-month loan is straightforward thanks to the minimum qualification requirements. Many lenders offer online loan calculators for added convenience.

These tools are designed to help customers to determine the cost of the loan and the monthly repayment amount. This is aimed at making it easier to plan even before lodging a loan application.

Borrowers benefit from no fees for late payments. Reputable lenders provide detailed information about the loans and customers can expect no hidden fees.

It is possible to repay the loan amount early or make a one-off payment. Some companies handle the loan application process within minutes and deposit funds into the borrower’s bank account in a matter of hours.

It could take only one hour.

Lenders usually provide reliable customer service tools, including live chat, email, and access to a representative via phone. Credit and affordability checks can be carried out as part of responsible lending.

When you submit the loan application online, you can track the progress from any location.

Additional tools provided by the loan companies are designed to make it easier to manage finances by simply logging in to your account. Lenders often send monthly reminders when the next payment is due.

What Are The Interest Rates For 12 Month Loans?

Interest rates are a key aspect of the 12-month loans that should not be taken for granted. Many lenders offer fixed interest rates, which enables borrowers to determine the cost of the debt and plan accordingly.

The applicable rates are often linked to the risk levels presented by the borrower, especially individuals with a poor credit history. Hence, the lender mitigates the risk with significantly higher interest rates.

Each loan comes with an annual percentage rate (APR), which covers the costs of the loan.

Repaying the debt over a lengthy period (12 months) can minimize the overall cost of the debt but it does not help reduce the monthly payments.

For this reason, it is important to use a loan calculator to determine the monthly repayment amount. This provides a surefire way to formulate a viable budget.

What Can I Use A 12 Month Loan For?

Unlike home and car loans, borrowers do not face restrictions as regards the purpose of taking out the loan. This ensures maximum flexibility. The loan amount is repayable through auto debit facilities (balance transfer) and post-dated cheques.

Borrowers can take advantage of these loans to deal with a variety of emergencies, including home repairs, replace a lost mobile device or handle a car breakdown.

This type of debt can act as a bridging loan when unexpected events cause financial havoc. However, many people take out a 12-month loan to provide funds for planned expenses like paying school fees, funding a home improvement project or engaging on a family vacation.

How Do I Find The Right Loan?

Choosing the ideal loan requires careful consideration. To make the right decision, borrowers need to consider a variety of factors, including the interest rate.

Some companies offer comprehensive services, which incorporate financial products like life insurance through strategic partners.

This is aimed at providing a one-stop shop for customers and awesome deals on loans.

Finding the right option is about picking a lender that offers the best deal that suits your unique financial situation. Doing so makes it easier to repay the funds without straining your budget.

You should determine the amount required to cover current needs. Short-term loans are ideal when looking for a smaller amount. A 12-month loan is well suited to situations requiring a significant amount of money.

The amount you choose to borrow should not compromise your ability to cover basic living expenses, such as utility bills, grocery, and transport costs. A 12-month loan serves some individuals better than others since it is a long-term commitment.

The longer repayment period requires a disciplined and well-planned approach.

The interest rates for 12-month loans have a distinct structure aimed at creating a balance between the lender’s and borrower’s needs.

What Is APR (Annual Percentage Rate) And Does It Work?

It seems that its getting easier and easier to apply for–and receive–a credit card or a short term loan. Mailers arrive each and every day at our homes advertising special perks, airline miles, or one-time-only low fees to entice us to apply for a combination of loans or credit cards.

There are ads on television and on the radio. Lending companies are even known to set up shop at colleges and universities across the globe offering free promotional t-shirts in exchange for a credit card application.

As a result of these efforts, it’s not uncommon to hear heartbreaking stories of people trying to dig themselves out of massive debt. But all too often it’s not the debt alone that is the culprit.

Before taking out payday loans, an unsecured loan, short term loan, or applying for any number of credit cards it is imperative you understand what an annual percentage rate is.

This is often considered a “hidden cost” that many consumers don’t fully grasp, forcing them further into debt. But as long as you do your homework, and educate yourself on how annual percentage rates work, you can avoid debt and other unnecessary charges. `

What is APR?

Annual percentage rate, often referred to as simply APR, is is the price you pay the credit card or loan company for borrowing money–essentially the percentage you can expect to pay in one year in order to borrow money tomorrow.

Many financial advisors suggest that consumers think of APR as a service fee.

Borrowing money is one kind of service, and you must fork over some amount for said service–just as you would for a mechanic who fixes your car’s engine or a delivery fee for a driver who drops off a big online purchase at your door.

That said, it always helps to read the fine print on any offer, as many companies allow consumers to avoid paying interest–or even an APR in full–if you make sure to pay your balance in full each month by a specified due date.

For this reason, it’s important to remember that no loan or credit card works exactly the same. Do your research and be smart about how you borrow cash!

What Determines The APR You Are Charged?

Many lenders will first turn to an applicant’s credit score in order to accurately determine a loan or credit card’s annual percentage rate. Typically, the better your credit score the lower your APR.

In addition to credit score, companies may also base your personal APR on details within your credit history. They may look to see if you have a tendency to pay your bills late or if you occasionally miss a payment.

A good rule of thumb to keep in the back of your mind is that if you have a poor credit score–or any existing unpaid loans–you will likely have to fork over a higher APR because the lender will be worried that you l will not be able to repay the loan.

This is an example of what lenders deem a “high-risk borrower.”

However, it is imperative that you always read the fine print in full. In some instances, you may actually be able to negotiate a significantly lower APR with your lender.

Additionally, some credit card or loan companies simply charge a fixed annual percentage rate, which basically means that the rate remains exactly the same throughout the loan’s life span, regardless of your personal credit score. But this is not the only alternate scenario.

There are other lenders out there who elect to charge a customer a variable annual percentage rate.

This can be confusing, as with a variable APR, rates can fluctuate both up and down based on a number of volatile factors, such as the health of the global stock markets.

That said, don’t worry too much about these types of APR rates if you do elect to go with one. Lenders are not permitted to adjust APR rates without notifying you ahead of time.

But it doesn’t stop there. Many lenders or credit card companies may also offer a low or reduced introductory APR rate in order to initially entice you to do business with them.

Again, it’s incredibly important to carefully read all the fine print, as these offers may be almost too good to start, however, after a specified amount of them of time, the lender may increase the APR.

Finally, it helps to keep in mind that payday loans, bad credit loans, and unsecured loans are notoriously expensive. Because of this it always helps to try and negotiate a lower APR.

How Do Lenders Calculate APR?

While APR sometimes sounds complicated, there is actually a pretty easy formula to calculate it. Simply follow the steps below:

  • Step one: Divide the finance charge by the amount of the loan (this will be different for each person).
  • Step two: Multiply the above result by 365 (for each day of a calendar year).
  • Step three: Divide the result by the term of the loan (again, this will likely be different for everyone).
  • Step four: Multiply the above result by 100.