Basic Understanding Of The 12 Month Loans

Low credit ratings can delay the process of securing a loan because lenders typically see bad credit ratings as a financial risk for applicants. You should know that there are loans which do not require you to possess a strong credit background or credit rating, that might no longer be the issue.

12 Month Loans

An unsecured loan that can be repaid inside a year is referred to as 12-month loans, also widely acknowledged as payday loans. They are personal loans that your pay cheque is paid out towards. The EMIs are immediately deducted from the salary account of the borrower. They can be of huge advantage as they help a person to raise funds to meet their financial requirements, and therefore must be repaid within 12 months or a year, and that it is the key aspect that separates it from other short-term forms.

If you were, for instance, to borrow 400 pounds. You would have to pay £ 56 per month during the next 1 year or 12 months to settle this loan as they’re the kind of loans, where the lenders usually allow individuals to borrow a certain amount of money and split it into 12 repayments for a twelve – month period. Borrowers should guarantee payments every month by taking advantage of small loans. Borrowers do not have to worry to catch up with monthly payments as the amount of the loan will be comparatively lower.


Here are some features of 12 month loans

  • There is a fixed time period of 12 month and no more than that
  • This is a form of short-term loan, which implies that when you receive your next paycheck, you ought to repay the money borrowed.
  • These loans can be obtained online with little or no inconvenience.
  • The allocation of loans for 12 months is extremely fast. You are expected to obtain the loan money on the very same day you qualified for it.
  • For such a loan, a strong credit rating is not a prerequisite. That means that such loans can also be used by individuals with low or no credit ratings.
  • Loans for 12 months are distinguished primarily by low loan amounts and higher interest rates.
  • To qualify for the loan, you must be 18 years or older.
  • A stable income is also a prerequisite to avail the 12 month loans
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Here are some of the benefits of 12 month loans

  • Such loans help to meet the need for urgent financing.
  • The 12 month loan application procedure is simple and non-problematic. The paperwork needed for it is usually minimal when trying to apply online.
  • Obtaining a high credit rating is not a requirement for using these loans, because these loans can also be used by individuals with bad credit.
  • There is no need for collateral too, unlike secured loans.
  • As far as repayment is concerned, it can be done through both online and offline means.

Eligibility Criteria For !2 Month Loans

Even though you do not require a good credit score to avail 12 month loans, you need to meet the other criteria set by the banking firms, mentioned below are the requirements that need to be met if you want to avail the 12 month loans

  • The candidate ought to have a reliable source of income and be working.
  • The monthly compensation criteria indicated by the lender are required to be met by you or any candidate.
  • You must be 18 years of age or older.
  • It is not necessary to have a strong credit rating, but it certainly helps to ease the process of securing a loan.
  • There is no prerequisite for a collateral
  • Lenders don’t normally require you to bring a guarantor along.

You will note that when requesting a lender for a 12 month loan, the interest paid is greater when compared to the repo rate of the Bank of England. This would only be done to compensate for the risk associated in loaning you the money you need.

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There are many other variables influencing the rate of interest of the 12 month loan and they could be different for each individual and the credit rating is one of the critical factors. In clearer words, the rate of interest levied will be lesser if you do have high credit ratings.

Besides your credit rating, there are several other important variables affecting the interest rate:

Having a strong record of loan repayment also works in favour of borrowers who’ve been looking for the authorization of the 12 month loan.

The heavy presence of defaults on your credit report will cause lenders to charge elevated interest rates.

The rate of interest levied on the sum would be lower if you or any other candidate is working in a large company or a highly reputed business.


This is some of the basic information about 12 month loans that you should know about. Yet here another important piece of information, even though you do not require a good credit score for a 12 month loan, having a good credit score always means lower rates of interest. You can always build your credit score, you can use any of the credit score building programs offered by lending institutions, you can even use a credit builder loan to help you build your credit score. So make sure you use these facilities.