12 Months; 12 Easy Payments
Taking out a loan is not something that you should ever enter into lightly, but something which needs a lot of thought before you make any lasting decisions. Although it may feel ‘normal’ to have debts, you shouldn’t let this impact your decision making by making you flippant over the type of loan you take out. While it may be easy to go with the first lender you see on the television or with the type of loan that your friend took out because they’ve given it a rave review, you should always make sure that you’re getting the best deal for your circumstances and needs as is possible.
Long term loans = large commitment
One of the concerns that many have over credit is that it may not be easy to pay off as they don’t have a huge amount of surplus income each month. Longer term loans can put people off because they commit you to making payments over a very long period of time, which makes big life changes (such as changing jobs or giving up work to start a family) difficult. Signing a credit contract means that you’re legally bound to make those payments, and if something happens which means that you’re unable to, then you could be penalised in some very inconvenient ways indeed.
A good and often very useful middle ground for those who want a decent amount of credit but who don’t want to be tied to payments for years on end is a 12 month loan. This allows the borrower to pay their credit back over the course of one year, which is long enough to make the payments easier to manage but short enough to hopefully avoid any crises which could contribute to not being able to pay the instalments. Having a year to pay off the loan can allow you to make plans for the future without having the worry and restrictiveness of credit payments for longer than 12 months.
The benefits of a 12 month loan
By taking out a short term loan, you can enjoy the positive mental uplift of being able to say that in a year’s time you’ll be free of the debt that you’ve taken on. This can help you to deal with the fact that you’ll be obliged to make the payments in full and on time each month, which can be hard if you’re committed to 60 loan payments (5 year loan term), for example.
The great thing about 12 repayments is that it’s enough to make a viable difference to your credit history, meaning that you’ll be able to borrow potentially more money at a lower rate in the future. This is how it works with credit – the more you borrow and pay back on time, the better you’ll be seen by lenders and the more you’ll be entitled to when you next need a loan. A good credit score can open doors and a 12 month loan term may just be your ideal way to build one.