Definition
A 12-month loan is more likely to fall into the division of instalment loans under the section of unsecured loans. It is also known as “personal loan” or “long-term loan”. In a 12-month loan, the borrower receives a loan from a lender for a specific amount of money to be repaid within 12 months. The loan is repaid in fixed payments, plus interest rates depending on lender to lender. The loan helps you pay the hefty car repair bills or help you deal with any unexpected financial emergency. The length of the loan repayment period is straightforward which is for 12 months.
Life is full of unexpected contingencies. Many of which require funds that you may not have at the time, a 12-month loan help you to get out from such circumstances of life easily and boosts you up. However, it is even important to note that the non-payment of a 12- month loan or any loan negatively influences your credit rating and drops your credit score, which would reflect badly for future borrowing.
The article will delve into all the informative things that you might want to know:
- Who can apply for a 12-month loan?
- Various ways to use a 12-month loan.
- Pros and cons of a 12-month loan.
- 12-month loan for bad credits.
- A 12-month loan with no guarantor.
1. Who can apply for a 12-month loan?
- Any individual over 18 years old or above.
- Any person who is a resident of the UK.
- Has a verifiable or valid bank account in his name.
- Any person who is salaried or self-employed.
2. Various ways to use your 12-month loan
Debt Consolidation: Debt consolidation means taking out a new loan to pay off a number of other debts or loans, which are usually unsecured loans. In real, multiple debts are combined into a single, large debt, which helps you repay the other small debts easily. A 12-month loan helps in consolidating all the other debts in one and pushes the burden from the head of learning and managing several debts or loan repayment dates. This also aids in cutting down the interest that you pay every month on several debts.
Home Renovation: Home renovation is essential because as a person evolves in life, modernization grabs on strongly and due to changing lifestyle, it becomes important to improve the home’s efficiency. It is done to enlighten the price of the house for future reselling value, to increase the comfort and enjoyment of the house, to upgrade the home’s function and also to fix a safety issue.
Personal Use: The 12-month loan can be used for many personal uses like to pay bills, to buy a new car, to pay instalments of any substantial purchase and for any financial emergency. A 12-month loan can be beneficial for all these options as the repayment cycle is designed for monthly repayment value that is usually easy to pay and track. The loan is also not secured against any asset so it is also safe and easy for people as they need not keep any mortgage but still can acquire the loan.
3. Pros & cons of 12-month loan
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Pros |
Cons |
| • The application method and formalities of a 12-month loan are very easy, facile, and comfortable as compared to secured loans. • The repayments of the loan amount are parted into 12 month period which makes the amount easier to be repaid over the time. • Regular repayments of the loan amount helps you build a good credit score. |
• The interest rates of a 12-month loan are usually higher than other loans in the market. • Longer commitment time is given in 12-month loans, which makes it quite lengthy over short-term loans. |
4. 12-month loan for bad credit people
There are many bad credit 12-month loan options in the UK market. You just need to make sure that you meet the criteria and also, that you can afford the repayments of the loan amount. This loan for bad credits is for all those people who need those funds but also need some extra time in paying back the money, as well as for people with less than perfect credit scores.
A 12-month loan for bad credit has decent terms and conditions than common bad credit loans. The best part about this loan is that once you repay the loan back in the given time it tends to develop your credit score and help you become fit to obtain a large amount of money next time. The time granted to reimburse the loan is slow and at a comfortable pace, that makes it easier for people and their wallets.
5. A 12-month loan with no guarantor
A 12-month loan with no guarantor is a loan that doesn’t require another person with better credit score or credit rating, perhaps a family member or a friend, to co-sign, guarantee or vouch for repayment of the loan amount. This loan is best suited for any person who feels uncomfortable asking somebody close to them to co-sign the loan agreement as it will provide you secrecy and you can easily acquire a loan at the same time.
Final Word
A loan that is repaid over 12 months can be a great way to help you recover from a financial emergency, but you must always look forward and compare your options and then choose wisely. There are many brokers like LoanPrincess, licensed by the Financial Conduct Authority that arranges loans between borrowers and FCA licensed lenders for people who are in need of funds or are going through any financial emergency.