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A Guide To 12 Month Loans

Twelve month loans are longer term loans sometimes known as personal loans or instalment loans. They are like payday loans, except the borrower has a longer period to pay back the money. With a payday loan, the payment is expected in full by the next pay period, which is how payday loans get their name.

-12 month instalment loans are similar to payday loans in another way. Usually, the interest is higher than a typical longer term loan. Payments are still much lower than with a payday loan, because repayment is spread out across 12 months.

-The additional factors that affect the interest rate of these instalment loans are credit history and income. You will need to show enough income to reasonably be able to pay back the loan, with the interest. Typically, the poorer the credit history, the higher the interest will be on personal or instalment loans. Sometimes the interest rate can be higher than with payday loans, due to greater risk to the lender.

-Many institutions offer personal or instalment loans, though banks are moving away from these types of loans, in favour of more lucrative long term loans for autos and homes. Often banks are more likely to offer a line of credit to customers in good standing, rather than write instalment loans. A line of credit or bank issues credit card can serve the same purpose. In addition, if a line of credit is paid back within a certain period, the bank will usually waive the interest. Many finance companies and other lenders not associated with banking institutions offer 12 month or instalment loans.

-Twelve month instalment loans are suitable for certain circumstances, such as being short on a down payment for a house or car, costly car repairs, and some emergency situations that require a substantial payment when funds are somewhat limited. They can be secured with something of value such as personal property, unsecured, or written with a co-signer who can guarantee the loan with additional income and a higher credit score.

Here are some factors to consider before taking out a 12 month loan;

– Ability to pay back the loan. While the lender will require proof of ability to pay, the lender cannot foresee an upcoming layoff or plans to take a vacation soon. These factors must be considered when determining if you can meet the terms and payments spelled out in the loan contract.

– Inability to pay on time many lead to additional fees and interest. Many lenders specify what the additional charges or interest will be, if the borrower fails to make timely payments on the loan. Sometimes the additional fees and interest can make it even more difficult to make the monthly payments.

– Other options may be available for financing a vacation or paying an unforeseen expense. If your associated with a banking institution and are in good standing, the bank may be willing to extend a line of credit or offer a bank affiliated credit card. The interest rates may be more reasonable with this type of financing option, but terms and interest rates can vary greatly from one institution to the next.

– Make sure the loan won’t hurt your credit in the long run. Make sure you’re able to pay back the loan. Even if you have a co-signer, he or she may become frustrated if help is needed to make monthly payments. The person will likely not be willing to help out in the future, if you default on 12 month loan payments. Defaulting on the loan or making late payments will likely be reported to credit bureaus. If your credit was poor before, this certainly won’t improve it. If your credit has just a few blemishes, defaulting or making late payments on a 12 month loan might significantly lower your credit score.

– If possible, take out additional insurance that will cover payments if you become disabled or are laid off from your job. This added protection can make the difference in having the ability to pay back the loan, should the unexpected happen, like an injury, illness, or lay off from your job.

7.8% APRC Representative

Representative example: Assumed borrowing of £37,700 over 180 months, with a fixed borrowing rate of 6.4% per annum for the first 36 months, followed by 144 months at the lenders standard variable borrowing rate of 5.9%. There would be 36 monthly instalments of £356.89 followed by 144 instalments of £347.59. Total amount payable £63,021 comprised of; loan amount (£37,700); interest (£21,791); Broker fee (£3000) Lender fee (£530). This would result in an overall cost of 7.8% APRC.

 

Accepted.co.uk is a trading style of Paloma Digital Limited. Paloma Digital Limited is an introducer and we will search our panel of brokers to find the right loan for you. Data Protection Registration Number: Z9868049.

Paloma Digital Limited is authorised and regulated by the Financial Conduct Authority. Firm registration number 769794. See www.fca.org.uk

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

 

7.8% APRC Representative

Representative example: Assumed borrowing of £37,700 over 180 months, with a fixed borrowing rate of 6.4% per annum for the first 36 months, followed by 144 months at the lenders standard variable borrowing rate of 5.9%. There would be 36 monthly instalments of £356.89 followed by 144 instalments of £347.59. Total amount payable £63,021 comprised of; loan amount (£37,700); interest (£21,791); Broker fee (£3000) Lender fee (£530). This would result in an overall cost of 7.8% APRC.

Accepted.co.uk is a trading style of Paloma Digital Limited. Paloma Digital Limited is an introducer and we will search our panel of brokers to find the right loan for you. Data Protection Registration Number: Z9868049.

Paloma Digital Limited is authorised and regulated by the Financial Conduct Authority. Firm registration number 769794. See www.fca.org.uk

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.

Paloma Digital Ltd. Company Registration No. 6934249. Registered Office: Office 229, 275 Deansgate, Manchester M3 4EL.