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- 12 month instalment loans provide solutions to longstanding financial problems and emergency situations too.
- They are long-term loans offered to deserving customers at affordable rates.
- Instalment loans are available online and offline to expand customer’s choices.
12 Month Loans
Payday loans are popular to those who have urgent financial concerns; but unknown to many, installment loans can be used during emergency situations, too. The loan offers a large amount of cash payable for a year, five years, or ten years, depending on the lender. It is a fast, easy, and way to get money and cover all your expenditures. You may also use it to start a business, fulfill your travel goals, or to simply finance your everyday expenses.
How It Works
To better understand an installment loan, or 12 month loans, here’s a quick example: Caroline is a pre-school teacher who earns a salary that is adequate enough. However, a few months ago, she was rushed to the hospital where she was asked to undergo various tests. Fortunately, she has an insurance to cover the other expenses, but still, she needs extra cash to settle the other debts.
As time and expenses pass by, she realised that her cash is barely enough. She plans to borrow from a bank but has stopped when his friend, who works as a teacher as well, told her about instalment loans.
At first, she was hesitant, thinking that she needs to settle the loan in one lump sum. However, she learned that she can repay the loan in portions. Basically, the principal amount is divided based on the length of the payment. If you will settle it in one year, then the amount will be distributed in 12 months, plus the interest rates and charges (if applicable). You are not required to compensate the whole amount; rather, you can repay it on a monthly basis. This is more manageable especially because the interest rates never change.
How Much Does It Cost?
As mentioned above, the borrower will not only pay for the interest rates; they will also repay other applicable fees. Whatever the fees are, each should be clearly explained in the contract agreement and by the lender per se.
How To Be Qualified?
Loans are known for its complex requirements, especially when it is a bank or a traditional credit union. However, installment loans only demand easy prerequisites, such as the income and credit history. Depending on their policies, the lender may ask a specific minimum amount before being qualified. Meanwhile, the credit rating may determine whether the loan is rejected or not. Lenders value the importance of credit score as it dictates if the borrower is a high risk or a low risk. For this reason, the applications of bad credit borrowers are declined. Nevertheless, there are lenders who may still accept your application, regardless of the credit history.
To proceed with the application, the applicant must complete an online loan application. The form is consist of necessary questions, from personal to financial. This will answer the borrower’s identification, income, employment details, and bank account information. Depending on the lender, other requirements may be demanded, such as the age, residency, etc.
Choosing A Lender
There are many lenders, both online and offline, and this gives the borrower choices. However, it may only overwhelm the applicant but if you know how to choose a reputable lender, you may reduce any hassle. First and foremost, consider only a lender that is licensed. No matter how small or big the lending company is, it is important they are complying with the state laws. Apart from this, here are other things that you should consider when looking for a reputable lender:
– Find a lender who is transparent
A lender who provides full disclosure of the rates, charges, and other terms and conditions may be considered as a reputable lender. As much as possible, you want someone who is honest enough with what they offer.
– Find a lender who has a good customer service
Whether you’re new to borrowing loans or not, chances are, you will encounter problems. With a good lender, you can guarantee that your concerns will be answered accordingly. Most installment loan facilities have a 24/7 customer service available.
– Find a lender who offers the lowest interest rate
Having a low-interest rate allows you to repay the loan easily. To find out which among the lender offers the best deal, take time to research and compare the rates of at least three loan providers.
– Find a lender who has been in the industry for quite some time
The longer they are in the business, the better. A lender who’s been in the lending industry simply suggests that they are stable. They’ve handled many clients over the years already, therefore, they know what they are doing.
Looking for a lender is easy; the difficult part is ending up with the right one. Exerting time and effort is important but if you’re not able to do so, you may always seek assistance from the professionals; otherwise, you may simply use comparison sites.
Asking Help From Professional Brokers
If you want to ensure that you can have the loan, even with a bad credit, you may turn to loan brokers. These professionals are educated, experienced, and highly trained. Above all, they have a wide access to different lenders. Their job is to know and understand your case, for instance, your income is low or your credit history is poor. They will use this information to find a suitable lender that will match your needs. This way, your chance of getting approved will be increased.
To avoid spending a lot, find brokers who are willing to provide their service for free. Rather than asking for a fee, these brokers will earn from a commission from the lender instead.
Using Comparison Sites
If you have little time and you don’t want to deal with anyone else, you may choose comparison sites instead. An effort is still needed, however, it is much easier because the website has already gathered the necessary details you can use for comparing. Most of these sites are for free and it contains information about various lenders, their rates, terms and conditions, and more.
12 Month Instalment Loan FAQs
What is an online instalment loan?
This type of loan creates an avenue for you to borrow huge amounts of money at lower interest rates, and pay them back in a stepwise manner usually on a monthly basis for an extended period. A contract is agreed upon before the loan amount is released and you have to abide by its offerings for the entire duration of the loan.
How does a 12 month loan work?
They are not different from other loan options offered by direct lenders. The only difference in this case is that you are allowed to make payments in small bits until the principal loan amount and interest are fully paid for.
How can I get a 12 month instalment loan?
With emerging online platforms, this type of loan is incredibly easy to get. As long as you are willing to go through the short application process, the money you need could get to you sooner than you expect. All you need to do is decide how much you want to borrow, fill the online form, provide the necessary documents, and wait for an approval.
How much money can I borrow?
How much you can borrow will depend on the lender you choose to work with, your needs, and your current financial situation. Furthermore, an excellent credit rating and a good debt track record will significantly increase your chances of borrowing more money. Based on these conditions, our lenders may be willing to give you as much as 10000 pounds.
Can I get the loan if I have bad credit?
Having poor credit means that lenders consider you a high risk, hence, it may be difficult for them to give money to you. While this is the norm, there are lenders who may be able to help you if you have other means of reducing the risk associated with lending money to you. This is where guarantors and collateral come into play.
What is the average duration of an instalment loan?
Because of the large of amount of money involved, instalment loans can run from 6 months to 5 years. This depends on the lender, the loan amount, and the loan contract. Your credit score may also have a role to play too. People with poor credit may not entitled to long loan durations. This means they’ll have to pay large installments over a short period. To avoid this, try securing the loan with collateral.
Can I pay off an instalment loan early?
If you find yourself in a position where you can pay off your debt in one single payment, then you need to contact your lender for advice. There are lenders who encourage their customers to pay off their debt in a single payment if they can. There are others, also, who view it as a breach of contract and will charge you more for doing so. This is why it is important to carefully examine your lender’s policies before doing business with them.