Life doesn’t always go as planned. Moreover, in the UK, it’s almost impossible to save for a rainy day given the rise in the cost of living. What do you do then if your plumbing breaks or your car has a flat tire? Ignoring the problem isn’t the solution. When such things happen, funds are needed and if you have a not-so-great credit history, no high-street banking institution will give you a loan. However, approaching a lender increases your chances of getting 12 month loans. But…
What Are 12 Month Loans?
Now, there are two types of short-term loans: payday loans and instalment loans. Payday loans tide you over till the next paycheck. You normally pay it back the next month. With 12 month loans, the loan term is pretty straightforward- 12 months. This distinguishes it from other short term loan types. A form of instalment loans, they can be secured, unsecured, with or without a guarantor. It’s safe to go for unsecured and no guarantor loans if you either don’t have high-value possessions or don’t want to risk losing them.
Benefits of 12 Month Loans
Loans with a duration of 12 months have certain benefits to them. Let’s take a closer look.
Boon for people with Bad Credit Rating/ Bad Debt:
Many UK citizens have fallen into the trap of bad debt with a missed payment here and an unpaid bill there. With a low credit rating, high-street financial institutions don’t want to do business with them. So, where do they go? There are many lenders who specialize in very bad credit loans & lending. Offering unsecured loans to UK residents, bad credit doesn’t matter to them. Because they’re taking a risk, APRs featured might be far higher. But, the whole point is that you want somebody to lend you money when you can’t ask your family or friends.
They Are Flexible:
Lending happens only after ascertaining that you have the financial capacity to pay back the loan. This is all the more important as the lender doesn’t have anything if you fail to make repayments. 12 month loans offer flexible repayments allowing you to spread the cost of borrowing. But, the longer the loan term, the more interest you’ll be paying in total. Of course, if you come by some extra cash regularly, you could pay it into the loan instead of spending it on something. In this way, you would pay off your loan faster and also save on interest.
Build Or Improve Credit Status
Instalment loans are very useful for turning around a bad credit rating. 12 month loans if taken and paid back in proper instalments on time can improve your credibility in the lending market. A strong repayment history has the power to push your credit score in the right direction. Remember, you should be confident you’ll be able to repay else you’ll just get yourself deeper into debt. For those starting out in their careers, instalments loans build a positive credit history and show an excellent credit report.
Access To Loyalty Discounts
As there are numerous lenders in UK offering 12 month loans, each of them is vying for attracting and retaining customers. The result- incentives and loyalty discounts to borrowers who make timely payments! The most popular forms include lower interest rate on your next loan, a larger borrowing amount and a plethora of other incentives. Best customer service is no exception.
Quick Turnaround Times
It’s said that the bigger the company, the more the paperwork. True to that, top banks and lending agencies in the UK need at least a week to process applications of people with good credit. Yet, with the small lenders, this is never an issue. All you do is apply online with the relevant documents. Advertising a quick turnaround time, cash will be transferred to your bank account in less than 24 hours!
Popularity of unsecured lending products, and specially 12 month loans is only set to rise. It’s crucial that you find a lender with a very good track record and unmatched customer service if you’re looking for instalment loans.