If you are in the market for a loan, you probably already know a little bit about how loans work and what you have to do to get one. Most banks or credit lenders will give you loans for a certain amount of time, also known as the terms of the loan. While many loans can stretch out to several years, some repayment terms are only good for 12 months. This means that you must pay back the loan within exactly one year from the borrow date. Before you decide if a 12 month loan is right for you, it is important that you know more about the details.
Many 12 month loans have a lower rate than other loans, simply because the lender will not be able to charge interest over an extended period of time. They know that once the 12 month period is over the loan is then paid in full. Because of this, 12 month loans are a little more difficult to get. You should have good to excellent credit, and you may not get the total amount you were hoping for. Lenders will base the total lending amount as well as the APR or interest rate on several different factors. They will take into account your current credit score, other debts that are not repaid, and your current employment status and paycheck amount. The lender will then take these factors and use them together to determine how much money they will lend you.
When you choose 12 month loans, remember that you must repay it within these 12 months. Otherwise, the balance will go into collections and the lender can charge even higher fees and rates. The good thing about 12 month loans is that you will have everything paid off within a year. You can opt to pay more than the minimum require payment if you choose in order to shorten the length of the loan.
Each lender has different terms of which they will offer their customers when it comes to 12 month loans. In most cases, the monetary amount will be less than if you were to borrow, say, under a 72 month loan. Because of the short amount of time given to repay it, most banks do not feel comfortable lending out a large sum of money for fear the borrower will not be able to shoulder the monthly payments. You should ask your lender what their requirements are ahead of time before you apply. This way, you will have a good idea of whether or not you will be approved, and you can read over everything before taking the plunge. For people with excellent credit who just need some extra money for a short period of time, a 12 month loan is an excellent option. If your credit is not so great or you feel like you might not be able to make the monthly minimum payments, a longer termed loan might be a better option for you.
If you can’t qualify for a 12 month loan, then you should check out bad credit loans: http://loanfindertool.co.uk/blog/post/Tips-on-how-to-get-a-bad-credit-loan