Bad Credit situation

12 Month Payday Loans- Not Necessarily High In Cost

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Borrowing has become an integral part of life; all of us borrow for one reason or the other in a lifetime. Many of us borrow more times also as per needs because borrowing from direct lenders is a dependable and anytime available facility to meet out emergency financial needs. Wide range borrowing options in the private lending sector are available to the borrowers can choose the best suitable one. Many times, the first time borrower feels it tough to choose the best type of loan. The 12-month loans have been in high demand; lenders also prefer to give 12 month loans with no credit check. As the demand is increasing consistently, the much famous single installment payday loan is also being approved for 12 months – naming it as 12-month payday loans.

What Is the Different Between Traditional Payday Loan and 12 Months Payday Loan?

The traditional payday loan is a small amount loan sanctioned for a maximum of 28 days or up to the forthcoming pay date. The entire amount is to aid back in a single installment that is automatically deducted from the salary account. As being the short-term – small amount- unsecured loan, the APR, in this case, is very high but salaried people prefer this format because of its easy availability and no documentation.

If the requirement is for reasonably good amount loan, paying back the entire debt in one installment from one month salary is not feasible because you need at least 60% of salary amount to meet our normal living expenses. The 12 month payday loans are designed to serve such borrowers demanding comparatively larger amount but with the facility of paying back in small installments at each month from salary check.

The entire loan amount plus the interest amount is divided into the 12 installments to ease the repay back load. As the salary is taken as the guarantee against the debt and the loan account is linked with a salary account, so the lender is satisfied with money security and profit.

Who are 12 Month Loans No Credit Check Direct Lenders?

12 months loan is the preferred choice of people from all walks of life in the UK. The most direct lenders offer 12 months loan but just a few offer this facility with no credit check promise. If you have a bad credit score, the borrowing options are limited because most of the mainstream regular banks will reject your application. Although no credit check lenders advertise for no credit check to assess the borrower’s repayment capability FCA has made it mandatory to do it.

These lenders check the borrowers’ credit history but don’t disqualify the borrower from taking a fresh debt despite knowing the high risk involved. The high risk is compensated by increasing the offered interest rate. Here comes the cost factor that makes the borrowing an issue to reconsider. Can you cut down the cost of no credit check 12-month loans? Can you eliminate the side effects of taking no credit check loan?

How To Cut The Cost And Eliminate Side Effects Of 12 Month Loans

Ok, you have bad credit score but need a debt compulsorily. Now make a strategy to curtail the cost and possible side effects focusing on the following aspects:

  • Do you have someone to pose as a guarantor? Guaranteed loans are cheaper.
  • Can you arrange lower cost funds from external resources to repay the debt in complete earlier than 12 months?
  • Have you done enough research work to finalize the lender on the basis of FCA registration, local repute, loan types, support, offered APR, etc?
  • Have you optimized the loan amount for a particular need?
  • Are you comfortable to pay 12 monthly installments without fail to avoid any penalty or interest rate hike?
  • Have you understood every aspect of the loan proposal by the selected direct lender?
  • Have you negotiated at best despite being in need of urgent cash help?

 

 

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