Compare 12-Month Loans

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What our Nerds say about 12-month loans

A 12-month unsecured loan is paid back in monthly instalments over the course of a year. This type of loan is for people who are looking for access to a relatively small amount of money that they want to pay off quickly.

Lenders sometimes charge high interest rates for short-term loans, which can make it an expensive way to borrow. That’s why it’s important to look at the total cost of the loan, including interest and charges, and make sure the repayments are affordable.

Holly Bennett Writer at NerdWallet

What are 12-month unsecured loans?

Unsecured 12-month loans are repaid in monthly instalments that last for a year. Unsecured loans don’t require an asset, such as your home, as security.

Loans with short repayment periods can sometimes have a high interest rate, but these can vary across providers.

» COMPARE: Unsecured loans

How much can I borrow with a 12-month loan?

Loans over short periods of time tend to be for smaller amounts than longer-term loans. They usually start at around £100 up to a maximum of £5,000, but more or less than this is available across providers.

How much you could borrow depends on your finances, including your income and your credit history. Not all lenders have the same criteria, so this comes into it too.

As you’ll pay back the original loan amount plus interest, and some lenders charge fees, look at the total cost of the loan and be clear on the terms of the agreement before applying. Only borrow what you need and can afford to pay back, regardless of the maximum amount available.

Can I get a 12-month loan with bad credit?

Some lenders offer 12-month loans to borrowers with a bad credit history, who might otherwise struggle to get longer-term loans. If you have a poor credit score, you are seen as a greater risk to lend to. This means you may have fewer lenders to choose from and be charged a higher interest rate. You may also be able to borrow less.

Consider if you can improve your credit score before getting a loan to open up potentially lower interest rates and more choice.

» MORE: What is a bad credit score?

What can I use a 12-month loan for?

You can usually use a 12-month personal loan for whatever you like, from home improvements to unexpected costs such as fixing a car, or even a holiday. The lender will usually want to know what you want to use the loan for when you apply.

As this type of loan can have high interest rates, make sure you need it and that the repayments are affordable.

» MORE: Am I eligible for a loan?

Can I use a 12-month loan to pay off other debts?

Paying off another more expensive loan can be an option, and you might consider it if you would save money in interest. However, 12-month loans tend to have high interest rates. If you’re considering a short-term loan to pay off other debts because you are struggling to keep up with what you owe, consider taking free debt advice. This can help you explore your options, check if you are eligible for government support and help to avoid the situation spiralling.

» MORE: How to get help with debts

Can I get a 12-month loan with no credit check?

No. When you apply for a loan the lender will carry out a credit check to work out the risk of lending to you and the terms it might offer. If you use a broker or comparison site to compare loans and check eligibility before you apply, it will typically be a soft credit check which won't be visible to other lenders. But once you apply for a loan the lender will do a full credit check and carry out affordability checks, such as asking for proof of income.

What are the alternatives to a 12-month loan?

If you are looking to borrow money that you pay off over a short period, other options might include a credit card or an arranged overdraft. This would be if you can pay the balance off in full and on time, before you have to pay interest on what you borrow.

» COMPARE: Bank accounts with overdrafts

Other types of loans include secured and unsecured loans that you pay off over a longer period of time. You could also look into becoming a member of a credit union or looking into a government budgeting loan if you’re receiving certain benefits. You might also consider borrowing from friends or family, but make sure you’re both clear on the repayment plan and consider putting the agreement in writing.

If you have bad credit you could consider guarantor loans, where a second person agrees to act as security for you to borrow money and agrees to pay the loan if you can’t. This helps reduce the risk to the lender, but the guarantor should be clear about the risk to them.

» COMPARE: Guarantor loans

How to apply for a 12-month loan

Before you apply, check that you are eligible for the loan. Using a broker or comparison site will help you find loans you are most likely to be eligible for and help you to find the lowest rate. Make sure you can afford the repayments and look at the total cost of the loan, including interest and any fees.

If you decide to go ahead with an application, you’ll be asked the amount you would like to borrow and for how long, along with what you’re using the loan for. You will also need to include personal and financial information, such as your address and income. The application can be very quick and the decision from the lender may even be instant. So take your time to think about the application and its terms before you apply.

The lender will run a credit check and affordability assessment, and if it accepts the application, it will send you a loan offer, which you can review and then choose to reject or accept.

Take your time to check the agreement carefully before going ahead.

» MORE: How to apply for a personal loan

12-Month Unsecured Loans FAQs

Is a 12-month unsecured loan different from a short-term loan?

Short-term loans typically last from a few months up to 12 months. A 12-month loan might be considered a short-term loan when compared with other unsecured loans, which may last up to 10 years or sometimes more. It may offer similar high rates of interest and low loan amounts as other short-term loans.

How much will a 12-month unsecured loan cost?

What you might pay for a loan depends on your circumstances, such as your credit score, along with:

  • the lender you choose
  • the amount you want to borrow, and for how long
  • the interest rate you are charged
  • any fees or charges for the loan

When you compare loans you can see the estimated total cost of the loans through the representative annual percentage rate (APR). You may be offered a different rate depending on your finances, though. You can also use a loan calculator to work out what you can afford to borrow based on the term and interest rate.

Is a 12-month loan right for me?

Before you take out any loan you should make sure you need it, that you don’t borrow more than you need, and that you can afford the repayments. If you need quick access to a relatively small amount of cash and are clear about the total cost of the loan and can meet the repayments, it could be an option. But be aware that interest rates can be high, and there may be alternative ways to borrow the money that cost less overall.

If spreading the loan over a longer period might be more affordable due to lower monthly payments, you might consider a loan with a longer term. Just be aware that you will be paying interest for longer, so look at the overall cost of the loan rather than just how much you pay each month.

» MORE: Different types of loans: a guide

Are there 12-month payday loans?

A loan lasting a year won’t usually be considered a payday loan, as these tend to be for shorter periods, or until your next payday. However, the line between payday loans and short-term loans has become less clear-cut, and you may find some lenders offering 12-month loans at very high interest rates.

You can check that the comparison site, broker or lender is authorised by the Financial Conduct Authority (FCA) by checking the FCA Register.

How do I get the best deal for a 12-month unsecured loan?

Comparing loans across several providers using a comparison site is a quick way to search for and compare deals. This can help you get a competitive loan, as rates and criteria vary hugely across lenders.

Look out for extra charges, such as initial fees for taking out a loan and additional charges that may apply, as well as the headline rate. Also make sure you know if the interest rate is fixed or variable. Lenders may offer lower rates if the loan amount is slightly more, so you may want to make use of personal loan calculators. But don’t borrow more than you can afford to pay back or need.

You can check your eligibility for loans without affecting your credit score using the search tool above. Just enter the loan amount, the purpose of the loan and how long you want to pay it off. You can also see deals in our comparison table above.

Can I repay my 12-month loan early?

You can repay a loan whenever you like, but you may be charged some of the interest you would have paid over the remaining months. This is typically a month or two of interest for loans under £8,000, but check the loan agreement to understand how an early repayment charge would apply to you.

Ask for an early settlement figure from your lender to find out how much it would cost to pay the loan off early, including charges, before you go ahead. If you want to pay it off in part you can ask if that's possible and how that would affect future payments. You then have 28 days to make the payment if you choose to go ahead with it.

Some examples

Here are some examples from UK loan providers that you can compare using the Monevo eligibility service:

    Admiral Personal Loan logo

    Admiral Personal Loan

    • Representative APR
      9.9% APR
    • Available Amounts
      £1,000 to £30,000
    • Min / Max Terms
      1 to 8 years
    Representative Example: Representative APR 9.9%. Based on a loan of £10,000 over 60 months at an interest of 9.48% p.a. (fixed). Monthly repayments of £209.91. Total amount repayable before £12,594.60. Maximum APR: 39.9%.
    More info
    Shawbrook Personal Loan logo

    Shawbrook Personal Loan

    • Representative APR
      14.7% APR
    • Available Amounts
      £1,000 to £35,000
    • Min / Max Terms
      1 to 7 years
    Representative Example: Representative APR 14.7% (fixed). Based on a loan of £10,000 over 60 months at an interest of 14.7% p.a. (fixed). Monthly repayments of £231.62. Total amount payable £13,896.65. Maximum APR: 29.9%.
    More info
    • Broker
    Post Office Money Personal Loan logo

    Post Office Money Personal Loan

    • Representative APR
      14.9% APR
    • Available Amounts
      £1,000 to £25,000
    • Min / Max Terms
      1 to 7 years
    Representative Example: Representative APR 14.9%. Based on a loan of £4,000 over 36 months at an interest rate of 14.9% p.a. (fixed). Monthly repayments of £136.65. Total amount payable £4,919.47. Maximum APR: 29.9%.
    More info
    • Peer To Peer
    Zopa Personal Loan logo

    Zopa Personal Loan

    • Representative APR
      17.9% APR
    • Available Amounts
      £1,000 to £25,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 17.9%. Based on a loan of £10,000 over 60 months at an interest of 17.9% p.a. (fixed). Monthly repayments of £246.27. Total amount payable £14,776.43. Maximum APR: 34.9%.
    More info
    My Community Finance Personal Loan logo

    My Community Finance Personal Loan

    • Representative APR
      18.85% APR
    • Available Amounts
      £1,500 to £25,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 18.85% (fixed). Based on a loan of £6,000 over 48 months at an interest of 18.85% p.a. (fixed). Monthly repayments of £173.64. Total amount payable £8,335. Maximum APR: 18.85%.
    More info
    Oakbrook Personal Loan logo

    Oakbrook Personal Loan

    • Representative APR
      19.9% APR
    • Available Amounts
      £1,000 to £10,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 19.9%. Based on a loan of £5,000 over 48 months at an interest of 19.9% p.a. (fixed). Monthly repayments of £147.71. Total amount payable £7,090.08. Maximum APR: 34.9%.
    More info
    Abound Personal Loans logo

    Abound Personal Loans

    • Representative APR
      24.8% APR
    • Available Amounts
      £1,000 to £10,000
    • Min / Max Terms
      1 to 3 years
    Representative Example: Representative APR 24.8%. Based on a loan of £2,000 over 36 months at an interest of 24.8% p.a. (fixed). Monthly repayments of £76.75. Total amount payable £2,763.00. Maximum APR: 24.8%.
    More info
    KOYO Personal Loan logo

    KOYO Personal Loan

    • Representative APR
      25.9% APR
    • Available Amounts
      £1,500 to £12,000
    • Min / Max Terms
      6 months to 5 years
    Representative Example: Representative APR 25.9%. Based on a loan of £6,000 over 48 months at an interest of 26.45% p.a. (fixed). 47 scheduled monthly payments of £204.89 and a final payment of £204.89. Total amount payable £9,834.01. Maximum APR: 34.9%.
    More info
    BetterBorrow Personal Loan logo

    BetterBorrow Personal Loan

    • Representative APR
      27.3% APR
    • Available Amounts
      £1,000 to £12,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 27.3%. Based on a loan of £5,000 over 42 months at an interest of 27.3% p.a. (fixed). Monthly repayments of £178.12. Total amount payable £7,480.93. Maximum APR: 39.8%.
    More info
    Finio Personal Loan logo

    Finio Personal Loan

    • Representative APR
      39.9% APR
    • Available Amounts
      £1,000 to £10,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 39.9%. Based on a loan of £2,000 over 24 months at an interest of 39.9% p.a. (fixed). Monthly repayments of £116.07. Total amount payable £2,785.68. Maximum APR: 69.9%.
    More info
    Lifestyle Personal Loan logo

    Lifestyle Personal Loan

    • Representative APR
      49.9% APR
    • Available Amounts
      £1,000 to £5,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 49.9%. Based on a loan of £3,000 over 36 months at an interest of 49.9% p.a. (fixed). Monthly repayments of £146.37. Total amount payable £5,269.32. Maximum APR: 49.9%.
    More info
    118 118 Personal Loan logo

    118 118 Personal Loan

    • Representative APR
      49.9% APR
    • Available Amounts
      £1,000 to £5,000
    • Min / Max Terms
      1 to 3 years
    Representative Example: Representative APR 49.9%. Based on a loan of £2,000 over 24 months at an interest of 41.2% pa (fixed). Monthly repayments of £123.64. Total amount payable £2,967.43. Maximum APR: 79.9%.
    More info
    Bamboo Personal Loan logo

    Bamboo Personal Loan

    • Representative APR
      59.7% APR
    • Available Amounts
      £1,000 to £8,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 59.7% (fixed). Based on a loan of £3,000 over 30 months at an interest of 47.73% p.a. (fixed). 29 Monthly repayments of £173.02 and a final payment of £172.92. Total amount payable £5,190.50. Maximum APR: 69.9%.
    More info
    • Only available to NHS/Public sector workers
    Salad Money Personal Loan logo

    Salad Money Personal Loan

    • Representative APR
      74.9% APR
    • Available Amounts
      £500 to £1,000
    • Min / Max Terms
      12 to 18 months
    Representative Example: Representative APR 74.9%. Based on a loan of £1,000 over 18 months at an interest of 57.24% p.a. (fixed). 17 monthly repayments of £87.57 and a final repayment of £79.94. Total amount payable £1,568.63. Maximum APR: 74.9%.
    More info
    Everyday Loans Personal Loan logo

    Everyday Loans Personal Loan

    • Representative APR
      99.9% APR
    • Available Amounts
      £1,000 to £15,000
    • Min / Max Terms
      1 to 5 years
    Representative Example: Representative APR 99.9% (fixed). Based on a loan of £3,000 over 24 months at an interest of 71.3% p.a. (fixed). Monthly repayments of £237.75. Total amount payable £5,706. Maximum APR: 299.8%.
    More info

If you are thinking of consolidating existing borrowing you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.

Our service is free of charge but we receive commissions from the providers we refer you to. This table is initially ordered by representative APR. You can use the options above the table to order it according to various criteria. You may be offered different rates depending on your personal credit rating.

Our comparison service features a selection of providers from whom we receive commission.

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