Borrowing Basics: Understanding 12 Month Loans

Popularly known as payday loans, 12-month loans are one of the best products in the financial circuit today. They are unsecured for a 12-month time period and can be easily applied for without a long loan sanctioning process. Financial crisis can knock on one’s door at any time and asking for help from others is not always the best option. This is why these short term advances of a small amount can be so advantageous to the borrower.

What is a 12-month loan and how does it work?

12-month loans are basically a short-term personal loan which is borrowed from a lender or bank and has to be returned within a 12-month period only. These do not require any separate account, therefore, getting them is so easy and hassle-free, the monthly installments are deducted from one’s regular salary account only. One of the things that bothers borrowers, at times, are the high interest rates, which ultimately makes these expensive. But, most people take these only when they find themselves in a sudden financial pitfall and thus do not give the higher interest rates much thought.

One can apply for these loans online by filling out the forms and as these loans do not require a guarantor or credit score, the loans get sanctioned quite quickly. One can pay the installments through their salary account either using the auto payment mode or the manual mode.

These loans can be taken by anyone as there is no requirement of collateral so these loans can be taken to cover any urgent medical or educational purposes.

Features of 12-month loans

There are certain salient features of these loans that make them stand apart from others:

  • Easy application: one can easily apply for these loans online without much trouble. The eligibility criteria of these loans are easy and, therefore, anybody can apply for them without any restrictions.

  • 12-month duration: one can take these loans only for a 12-month duration which means one will have to pay within a year, regardless of the amount borrowed.

  • No guarantor and credit score is required: unlike other loans, these payday loans do not require a good credit history or a guarantor of any kind because, here, financial urgency matters the most, and not financial history.

  • Expensive interest rates: because these loans are given away easily and that too for only a 12 month period without much compulsions imposed on the borrower, it is inevitable that these loans are pricier as compared to other type of loans.

Benefits of 12-month loans

Some of the advantages that one can enjoy are:

  • One can get a loan for any amount depending on the emergency and requirements.

  • Anybody can apply for this type of loan and it can take care of educational or medical expenses.

  • These loans are approved within 24 hours and will be directly credited to one’s bank account.

  • One can avail many discount offers on these loans, which most of the banks and lenders design as a marketing strategy. But, nonetheless, these discounts can be highly benefitting to a customer.

  • They are highly flexible in terms of repayment, as one can pay off the loan as one wishes within a year.

  • One can take these loans and pay them off in a timely manner to increase one’s credit score.

  • 12-month loans are flexible and one can avail them easily without much trouble of documentation and credit scoring.

  • These 12 month loans can be obtained without the need of any guarantor or collateral document or a good credit score and the amount of loan would be credited within 24 hours direct to your bank account thus offering you easy loans.