These loans are similar to their counterparts in many ways. Logically speaking, it is not even difficult to work out that both borrow a sum of money from a lender and then repay it over a period of time while paying interest for this privilege. However, several things can make a 12 Month Installment Loans loan unique. As the name suggests, these loans can cover a period of 12 months. For comparison, their counterparts are available for a period of between six months or a year.
What is 12 Months Installment Loans?
These require that you make regular, fixed payments, and you repay them over a period of up to 12 months. However, it is not the only component of repayment as there will be costs and interests. Logically speaking, this is something typical for all kinds of loans, but these are greater than with other kinds of loans. Apart from these standard components of repayment, additional ones have at least some degree of uniqueness when it comes to 12 Months Installment Loans.
How do 12 Months Installment Loans work?
They can be categorized as rent to own contracts or lease to own schemes. The main difference between these types of deals is that the rent one gives you possession of your collateral, while the latter does not. The implication of this is in your ownership rights: you have them with the former but not with the latter. Logically speaking, this makes a difference in planning the future as there are obligations when you set up a leasing contract, but you do not have them in case of the rental to own contracts. However, there are also risks and advantages if you opt for these kinds of deals.
What do You Need to Get a 12 Months Installment Loans?
These are relatively easy to get, but you need to settle some conditions first. For example, you must be a legal adult; you have a good credit score and a steady job. Once you have met these conditions, you can go on to do two things: apply for a financial institution or find one on the Internet and apply for a 12 Months Installment Loans online.
What Should you Know Before Taking a 12 Months Installment Loans?
These loans can be a convenient option when you want to have a vehicle, but there are several things you need to know. For example, the amount of money you can get at first will depend on the vehicle’s age and condition. To be eligible, your car must also be insured.
12 Months Installment Loans rates and terms
If you decide to take a 12 Months Installment Loans with another loan, the term of this type of financial help can be from three to four years. You should make sure you either get a cheaper one compared to your income would cover all your loans within this period. This is very important, as interest rates tend to be 0.5% more expensive than other types of loans. In the first year, you will spend approximately 25% interest on these loans, five times higher than other loans. It is hard to justify the extra cost if you are not buying an expensive big screen TV but a small flat-screen TV that will only appreciate at a price and not depreciate like other items in this category do.
Risks of 12 Months Installment Loans
Now that we have seen what a 12 Months Installment Loans are, you might be interested in its risks. One of them is what happens when your chosen lender closes its doors. Logically speaking, whatever the reason for it, this can have repercussions on your loan deal. If the lender shuts down before the end of the period during which you are supposed to repay the loan, you will suffer losses, which does not happen with any other types of loans.
Benefits of 12 Months Installment Loans
This is a convenient option when you need to buy a car or a house with cash or some other form of collateral attached, but you do not have the required sum. You could borrow it, pay the secured loan back, and keep the vehicle that has the collateral. On another note, financial institutions and other interested parties often use these deals as a marketing tool. Knowing that potential customers like to get a discount on an item to be paid back later, they are more than glad to help you get one in exchange for a small fee. This is not necessarily bad, but it needs to come with responsibility. You need to research if your deal is safe or not and what it entails in terms of its risks.
Best Tips for Taking Out 12 Months Installment Loans
One of the best tips you can get when you want to take a loan is to make sure you actually need it. For example, the temptation to get a nice car or an expensive flat-screen TV might be too much for you to resist. However, even if you could afford it at the time of application and even later on, but your other bills would have to suffer from this single indulgence, do not do it. It does not matter if it is a lease to own scheme or not.
List of Documents to Apply for 12 Months Installment Loans
There are a few things you need to have to apply for 12 Months Installment Loans. These include:
- Proof of income.
- Proof of residence.
- Details on any vehicle that is the loan.
- Details on any car insurance that is taxable and which will make it easier to calculate exact interest rates in this case.
- Copy of your credit report, which is recommended if it’s not stored electronically.