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Poor credit scores can hinder the process of acquiring a loan as lenders usually perceive applicants with low credit scores as a financial risk. That may not be the problem anymore as there are loans that do not require you to have a good credit history or credit score.
An unsecured loan that can be paid back within a year is called 12 months loans, they are also known as payday loans. These are personal loans that are paid out against your paycheque. The EMI’s are automatically debited from the borrower’s salary account. They can be of great help as they aid an individual in getting funds to cover their financial needs and it must be paid back within the span of 12 months or a year and it is the main feature that distinguishes it from other kinds of short term loans that are provided by a variety of marketplace lenders.
For example, if you were to borrow 400 pounds. In order to clear this debt, you will have to pay £56 each month for the next one year or 12 months as they are the type of loans, where lenders typically allow people to borrow a sum of money and divide it into 12 repayments for the span of 12 months. By making use of small loans, borrowers can ensure monthly payments on time. The borrowers need not struggle to keep up with monthly payments this is because the loan amount is relatively less. Small loans like these are always a good choice for anyone to budget anything.
Here are a few features that make the 12 month loans quite unique.
There are a lot of benefits that the 12 month loans bring along with them. Listed below are a few benefits of availing 12 month loans
Even though poor credit scores are not a requirement to avail the 12 month loans, there are other criteria to be met by anyone applying for a 12 month loan
Approaching a bank for a 12 month loan, you will notice, the interest that is being charged is higher as compared to the Bank of England repo rate. This is only done to account for the risk involved for the lenders and financial institutions in lending you the required money.
There are other factors that influence the 12 month loan interest rate and they may be different for different people and one of the vital factors being the credit score. In simpler terms, if you have good credit scores then the interest rate charged will be low.
There are a few other factors influencing the interest rate, apart from your credit score:
Given that there are loans available for people with poor credit scores and history, it does not mean you can rush into it. There is always a catch that you should be aware of, it should be an informed decision.
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