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Alternatives to 12 Month Loans

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The money will always be an essential part of our lives, but failure to manage it properly may create financial turbulence. We often find ourselves short of cash when an emergency crops up. Some of us use their savings and some of us start applying for personal loans. 12-month loans are short-term loans that you can borrow for 1 year. The cost of repayment can be spread over 12 months to provide you with ease of repayment. But what if you need a longer repayment period? Is there any other option available?

Let us learn about the alternatives to 12-month loans in this blog.

1.      Credit Cards

Do you need to replace your boiler? Does your car require immediate repair? The insurance date is near and you do not have sufficient cash to pay upfront? So many of us take out our credit cards to pay for these unforeseen expenses. Credit cards are revolving credit. The bank or the credit card issuer assigns a spending limit when you apply for a card. That means the maximum amount that you can spend using the card will be assigned to you beforehand. You can choose to repay the amount that you have spent either in full or you can pay in parts. When you pay in parts, the remaining amount gets carried forward to the next month that you have to pay on your next credit card bill due date.

So, typically, you keep revolving the balance on your card. If you think you cannot manage to repay a 12-month loan in fixed installments, try using a credit card.

2.      Authorized Overdrafts

An overdraft is a short-term financing option that you can avail of from your bank. It works similar to any other debt. It allows you to borrow money through your current account. You can borrow more money than what is in your account. Always contact your bank if you are planning to spend more than your account balance.

The bank will decide a limit and if you agree with the limit set by the bank, you can spend it the way you want. Interest will be charged on the amount that you borrow from the bank and sometimes, there are additional fees as well.

But if you have spent more than your account balance without informing your bank, it will be considered an unarranged overdraft. It could cost you more. To be on the safer side, contact your bank and find a solution so that you have a clear picture of what you owe to the bank and by when you will have to pay it back.

3. Ask your Friends, Family & Employer

You can ask your friends and near ones to help you out with your finances. Talk to them about your situation and create a repayment plan. Let them know about your concrete plan of repayment so that they can lend you money without any second thought.

Also, you can always reach out to your employer. Ask them to provide you with a payday advance. They may deduct the amount every month from your paycheque or you may have to pay back separately. However, ensure that you borrow an amount that you can easily repay. If you fail to repay the loan you have taken from your friends, family, or even your employer – it sets a wrong impression. And there are chances that they will not be willing to lend you money again in the future.

How do our online loans work?

Applying for a loan with 786 Loans is very simple and straightforward. You just have to fill in an application form with all your details such as – bank account number, the loan amount that you are considering to borrow, loan duration, employment status, monthly income and outgoings, and residential address.

Once you fill out the application form and hit the submit button, you will find the list of lenders who are willing to lend you a loan. A soft credit check will also be performed on your report for the initial screening. Post that a mandatory hard credit check will be conducted to evaluate your creditworthiness and affordability. The lenders we work with provide a rate lock guarantee. That means the rate that will be proposed to you will remain the same throughout. There will be no changes in that rate of interest. Also, you can see the list of lenders who will reject your loan application.

Compare all the offers that you receive in terms of the overall cost of the loan. Go through the fine print and Terms & Conditions to know what you are signing up for. If you face any concern, raise it to the lender and talk to them to sort it out. If you are satisfied with the offer that the lender has proposed, give your nod and the lender will transfer the amount to your bank account.

Click here to start comparing personal loans at the real interest rates.