12-month loans, also known as 1-year loans or sometimes even payday loans are a type of personal loan that comes with maximum repayment tenure of 12 months i.e. 1 year. These short-term loans are provided to individuals as long as they have a steady source of income. The biggest advantage of this loan and the factor that contributes to its popularity is that even those with relatively low credit scores can avail themselves without having to provide collateral. 1-year loans for bad credit are usually availed by those who have emergency expenses or bills.
Features of 12 Month Loans
12-month loans are relatively unique because of their features. Take a look at some of the salient ones below:
- As the name suggests, these loans come with a repayment term of 12 months. Generally, loan repayment tenures can range between months to years but since the term here is shorter, the rate of interest imposed is high
- Payday loans are disbursed to individuals with a steady source of income. Applicants can be either salaried or self-employed
- Most 1 year loans for bad credit can be availed online and the application process is simple and hassle-free
- While most loans are disbursed to individuals who have a very high credit score, 12-month loans are usually available for borrowers with average or low credit score depending on the lender’s terms and conditions
Benefits of 12 Month Loans
As mentioned previously, 12-month loans are one of the most popular loans available in the market today due to their incomparable benefits as listed below:
- Unlike most other loans, 12 months or 1-year loans do not require collateral making them highly sought after
- The biggest factor that prevents applicants from procuring loans easily is their credit score. The lower the credit score; the harder it is to avail of a loan. In the case of 1-year loans, however, even those with relatively low credit score can apply for and receive these loans
- Imagine receiving a loan within just a day of applying for it. The disbursal process for 1-year loans is extremely quick and individuals do not have to run from pillar to post anymore as these loans can be availed online as well
- As they are similar to personal loans, 12-month loans for bad credit can be used for a multitude of purposes such as paying bills, emergency expenses, or even for a vacation without having to justify the same with additional documents
Eligibility Criteria for 12 Month Loans
Although payday loans are easy to avail, there are certain criteria that have to be met before being eligible to receive the same as given below:
- The main criteria for 12-month loans are that the applicant must have a steady source of income (can be salaried or self-employed)
- The applicant must be between the ages of 18 and 60 years
- Their monthly income must meet the requirement set by the lender. This amount will vary depending on the area of residence and other factors
- Sometimes lenders may also require borrowers to have a minimum duration of work experience or a minimum salary requirement
1-year loans for bad credit are perfect for those looking to avail of a relatively smaller loan to pay off certain expenses. Not everyone can maintain a high credit score and having a low credit score is always a hindrance when it comes to procuring loans. As payday loans are disbursed quickly and can be availed online, they can be extremely useful if utilized well. The EMI to be paid is also directly debited from the individual’s monthly salary making this not just an easy-to-avail loan but also one that is hassle-free to repay.
For customers wondering where exactly they can avail such an advantageous loan need not look too far. We at Money View provide loans of up to Rs. 5 lakhs through an application process that is entirely paperless while adhering to all safety and security norms. The repayment tenure is flexible and can last up to 5 years. The best part is that Money View processes applications through a unique algorithm that is not entirely dependent on credit scores, ensuring that even those with lower credit scores can avail of a loan easily and effortlessly. To apply for an instant loan, visit Money View today.
Frequently Asked Questions (FAQs)
Personal loans and payday loans are two types of loans that can be used for multiple reasons and do not necessitate collateral. However, these loans differ primarily in two ways:
- The repayment tenure for personal loans vary between 6 months to 5 years or as determined by the lender whereas for payday loans, the maximum repayment tenure is 12 months
- As both types of loans do not require collateral, the interest rate imposed is on the higher side. However, personal loans are disbursed only to those with a credit score of 700 or above whereas payday loans are disbursed to even those with a relatively lower credit score as long as certain conditions are met by the borrower
12-month loans come with a plethora of advantages such as no collateral or minimum credit score requirements, however, due to these benefits and shorter repayment tenure, the interest rate imposed is high. This makes it a loan that is not easy to repay unless the borrower’s income is high. Therefore these loans must only be availed as a last resort and only if all other options have been exhausted. Additionally, if a borrower defaults on 12-month loan payments, his/her credit score will be affected significantly.
No, applicants should ensure that the amount they borrow is on the lower side and most importantly an amount that can be easily repaid with their monthly income. As 1-year loans for bad credit do not require collateral, the rate of interest imposed is high. Therefore, in order to ensure that these loans are repaid on time with interest, borrowers must avail of a smaller loan amount.