12 Month Loans
A 12-month loan is a short-to-medium term financial solution that allows borrowers to repay the borrowed amount in equal instalments over one year. These loans are ideal for managing expenses that require more time to repay than short-term loans, offering predictable repayment schedules and manageable monthly instalments.
What Are 12-Month Loans?
12-month loans provide a fixed amount of money that borrowers repay in 12 equal instalments, including both the principal amount and interest. Loan amounts typically range from £500 to £5,000 or more, depending on the lender and the borrower’s financial circumstances.
How Do 12-Month Loans Work?
- Application: Borrowers complete an online or in-person application with personal, financial, and employment details.
- Approval: Lenders assess affordability and creditworthiness, and some may conduct a soft credit check.
- Funding: Once approved, funds are transferred directly to the borrower’s account, often within 24 hours.
- Repayment: Borrowers repay the loan in 12 monthly instalments as per the agreed schedule.
Benefits of 12-Month Loans
Manageable Repayment Period
Repaying the loan over a year provides enough time to spread the cost, making monthly instalments more affordable.
Fixed Monthly Payments
Having a predictable repayment schedule helps with budgeting and financial planning.
Quick Access to Funds
Many lenders offer fast approval and same-day or next-day funding, ensuring timely financial assistance.
Flexible Loan Amounts
12-month loans typically offer larger borrowing amounts than shorter-term loans, catering to various financial needs.
Opportunity to Improve Credit
Making timely repayments can boost your credit score and improve access to future credit.

Things to Consider
Total Interest Costs
Longer repayment periods can increase the total cost of borrowing due to interest accrued over time. Always review the total repayment amount.
Credit Check Requirements
Some lenders may perform a hard credit check, which could affect your credit score.
Affordability
Ensure the monthly repayments fit comfortably within your budget to avoid late fees or additional charges.
Who Can Apply for 12-Month Loans?
- Individuals aged 18 or older with a regular income.
- Borrowers with a UK bank account for repayments.
- People with good, fair, or poor credit histories; some lenders specialise in bad credit loans.
Alternatives to 12-Month Loans
If a 12-month loan isn’t the best fit, consider:
- Short-Term Loans: For smaller amounts repaid over a shorter period.
- Personal Loans: Offer larger amounts with flexible repayment terms of 1 to 5 years.
- Credit Cards: Suitable for smaller, ongoing expenses with flexible payments.
Frequently Asked Questions
Loan amounts typically range from £500 to £5,000, though some lenders may offer higher amounts for eligible borrowers.
Yes, many lenders offer 12-month loans to individuals with poor credit, focusing on affordability and current financial circumstances.
Funds are often available within 24 hours of approval, depending on the lender and application timing.
Yes, all lenders offering 12-month loans must be authorised by the Financial Conduct Authority (FCA), ensuring fair practices and borrower protection.