There are so many short-term loans available in the market that it becomes difficult to choose the one without any confusion - an embarrassment of riches. You may encounter the need of a loan even if you have a bad credit.
Unfortunately, banks do not entertain applicants with less-than-stellar credit scores. On the contrary, direct lenders can finance your needs as long as you have a repayment capacity. Among all options available in the market, 12 month loans with no credit check from direct lenders are considered to be the best option. However, there are several things that you should know about these funding sources.
These are unsecured loans which require no guarantee and collateral and each instalment is paid as immediately as you receive your next paycheque. You can be tempted to apply for such loans as the procedure is not hectic (you do not have to get around lenders for the paperwork) and funds are credited without further ado.
Before filling the application, you have to consider the following points:
Interest rates
Interest rates and fees can vary from a lender to lender. You must contact multiple lenders to know about interest rates and fees and sign the contract with one, who provides the same amount at lower interest rates. However, make sure that you are able to pay all dues on time. Otherwise, you will be entwined with rollovers.
Your need
Though you can get 12 month loans on easier terms, you have to reimburse the entire loan in the end. If you continue taking yearly loans, you might be thrown in a permanent cycle of debt. Therefore, you should not apply for these loans as long as it is not necessary. Try to cut down on your expenditure such as going out for food and visiting cinema. This will help you increase your savings that you can utilise in cash payments.
Look out for hidden fees
Make sure that you read all terms and conditions before signing into a contract. Do not hesitate to ask your lender if you have any doubt about any terms. Peruse all terms and conditions to discover any hidden costs.
Prepayment charges
Not all lenders provide this facility to the borrowers. With prepayment charges, you can pay off your debts quickly without bearing high interests. However, some loan sharks impose penalties if you repay more amount than the agreed. Ask your lender if the contract has a clause of prepayments without penalties. If this is the case, you should try to repay more than a minimum amount.
The bottom line
A direct lender can provide you the 12 month loans without any collateral and guarantor. This is the easiest option, but it is still a difficult option as you have to make high interest payments. If you are not certain that you will not be able to pay off all dues on time, you should opt for other alternatives such as short-term personal loans and credit card use.
