People go through rough financial spots from time to time. When it happens and you don't have an emergency fund to fall into, one of the most common ways to get past the problem is by borrowing money. It is no surprise, therefore, that loans such as payday loans, logbook loans and guarantor loans among others continue to flourish in the lending industry.
Joining the aforementioned loan types is another short-term loan option known as the 12 month loan deals. For first time borrowers who just heard about the financial product, below is a beginner's guide on the loan. If you're planning to get one any time soon, keep reading for a closer look on the loan type.
As the name implies, 12 month loans are unsecured short-term personal loans that are offered to anyone who needs quick cash for emergencies and other pressing expenses. Just like payday loans, the loan is an ideal quick fix solution seeing that it is widely available online and the approval time is generally done within a day.
To confirm if a 12 month loan is the right type of personal loan for your circumstance and needs, read the guide at http://www.uswitch.com/loans/personal-loan-guide/ first.
Because the loan is unsecured, the loan amount is smaller than logbook loans but slightly larger than payday loans. With a 12 month loan, you can borrow from £800 up to £2,000. Compare that with payday loans which generally offer from £100 up to £1,000, 12 month loans are relatively more flexible.
12 month loans are payable over a 12-month period at Representative APR somewhere at 400%. For instance, if you plan to borrow £800 at a fixed p.a. interest at 100% and the APR is 427%, you'll be paying £146 per month which is not inclusive of the transmission fee.
Like any unsecured loans, the requirements for a 12 month loan are pretty minimal. You'll just need to be of legal age and a resident of UK, first and foremost. Then you need to provide proof of employment or proof of income. Your income plays a very active role in your approval as it is one of the main factors every lender considers when assessing your capability to repay the borrowed money.
Once the requirements are met, you can now proceed to applying for the loan. Confirmation or approval is relayed after assessment then the money is wired to your account.
Unlike with payday loans, lenders offering 12 month loans conduct credit checks. People with bad credit are more likely to fail but not to worry because there's another option for you to ensure approval.
In the event that you fail the credit check, the lender may allow you to get a guarantor, someone who doesn't necessarily have to be a homeowner but he or she should have good credit history.
If you fail to repay the loan for some reason, you may face consequences such as extra fees and charges. The lender will also hire a debt collector to collect the money from you. If you have a guarantor, that person will be responsible for paying off the loan that you are unable to repay.