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12 month loans
Find a great value loan paid off in a year
MoneySuperMarket is a credit broker not a lender. You must be 18 or over and a UK resident.
What is a 12 month loan?
A 12 month loan is a short-term borrowing option where you repay the amount over one year, typically in monthly instalments. It’s ideal if you need a quick cash boost but want to spread the cost to make it more manageable.
Whether it’s for an unexpected bill, car repairs, or a house renovation, a 12 month loan can offer flexibility without locking you in long-term.
Interest rates can vary based on your credit score and lender, so it pays to shop around.
How does a 12 month loan work?
Work out how much you need. Try to be accurate, as borrowing more than you need will leave you paying more in interest repayments
Choose the best deal for you. Lower interest rates mean lower monthly repayments, but check the terms carefully, including any potential fees, before you apply
Receive the money. The loan will be paid directly into your bank account so you can start using the money immediately. Your monthly repayments begin straightaway
Make monthly repayments. You'll make 12 fixed monthly payments until your loan is cleared. Watch out for early repayment charges if you choose to pay it off early
What can I use a 12 month loan for?
There are several things you can use a 12 month loan for. These include:
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Car repairs
Cover the cost of unexpected maintenance or MOTs
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Debt consolidation
Combine existing debts into one monthly payment
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Home improvements
Pay for upgrades like new flooring or appliances
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Weddings or events
Help manage the cost of a special occasion
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Emergency expenses
Cover urgent bills like medical or vet costs
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Holidays
Spread the cost of travel or a family break
How is your loan cost calculated?
How much a 12 month loan will cost depends on a number of factors, including:
The loan amount: The borrowed amount that you should pay off within 1 year. It is usually harder to borrow a larger amount over a short period, such as 12 months
The interest rate or APR: This will be decided by your lender, based on your financial history and your credit rating
Our loan calculator can help you work out the total cost of your loan over different terms and at different interest rates.
How much could a 12 month loan cost?
MoneySuperMarket data from September 2024 indicates that the average APR for someone taking out a 12 month loan between £1,000 and £2,999 is 37.8%. Here’s what that would cost:
Loan Details | £1,000 loan | £2,000 loan |
|---|---|---|
Loan term | 12 months | 12 months |
APR | 37.8% | 37.8% |
Monthly repayments | £98.72 | £197.44 |
Total interest paid | £184.62 | £369.72 |
Total repayment amount | £1,184.62 | £2,369.72 |
What are the pros and cons of a 12 month loan?
There are several factors to consider before applying for a 12 month loan. Here are some of the main pros and cons to weigh up:
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Advantages
You’ll receive the funds quickly once approved and can spend them how you wish
By paying the loan off over 12 months you’ll save on overall interest compared to longer term loans
A range of deals from leading lenders are available
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Disadvantages
It can be difficult to borrow larger sums compared with longer term loans, particularly if your credit score is low
Monthly repayments can be higher than if you paid the loan back over a longer period
You may not get the best advertised rate if you have a poor credit rating
How much can I borrow with a 12 month loan?
With a 12-month personal loan, borrowing amounts typically range from £1,000 to £25,000. Higher amounts often require a longer repayment term.
The amount offered varies depending on personal finances such as:
Affordability: Lenders will assess your monthly income and expenses – including existing debt repayments – to ensure you can comfortably meet the repayments
Credit score: A higher credit score can increase your chances of approval and access to higher sums
How quickly can it be approved?
Many online lenders can approve a 12 month loan within minutes – some even offer instant decisions.
If you're approved, the money could be in your bank account as quickly as the same day or within 24 hours, especially during business hours.
To speed things up, make sure your details are accurate and have any required documents ready.
What should I consider before taking out a 12 month loan?
Taking on debt should never be treated lightly. Here are some things to think about before applying for a loan:
Taking on debt should never be treated lightly. Here are some things to think about before applying for a loan.
Do I really need to borrow?
Think about whether the loan is essential or if you can manage without it. You will almost always pay back more than you borrow, so make sure your reason for borrowing makes sense.
Is my credit score in good shape?
Lenders use your credit rating to decide your interest rate. A better score could mean lower repayments, so it’s worth checking and improving it if you can.
Can I afford the monthly repayments?
Make sure the repayments fit comfortably within your budget. Missing payments can hurt your credit score and lead to extra charges.
Have I checked all the fees?
Look out for any loan fees, particularly late payment charges, or penalties for paying off the loan early. These can all add to the total cost.
Have I compared my options?
Don’t settle for the first offer – shop around. Use a comparison site such as MoneySuperMarket to find the best deal for your needs and circumstances.
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Am I eligible for a 12 month loan?
You may be eligible for a 12 month loan if you're aged 18 or over, a UK resident, and have a regular income.
Each lender has their own criteria, so you’ll also need to meet their specific checks on credit score, affordability, and financial history.
Can I get a 1 year loan with bad credit?
Yes, you can get a 1-year loan with bad credit, but your options may be more limited.
Some lenders specialise in helping people with poor credit. However, interest rates are likely to be higher, and you may not be able to borrow as much as someone with a stronger credit score.
Always check the total cost of the loan and make sure the repayments are affordable before committing.
How to choose the best 1 year loan
To find the best 12-month loan for you there are a number of things to consider:
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Calculate how much you need
Every extra pound you borrow will have to be paid back with interest. This pushes up the overall cost of the loan.
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Compare to find low interest rates
The lower the interest rate you can find, the cheaper your loan will work out. Shopping around is the best way.
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Make sure you can afford the repayments
You’ll need to agree to 12 fixed monthly repayments. Don’t take out the loan unless you’re confident you can cover it in full.
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Read the terms and conditions
There are likely to be fees for late payments or an early repayment charge if you want to clear the loan before the end of the term.
Longer loan terms can lower APR but increase overall interest paid
12-month loan terms typically carry the highest APRs, but opting for a longer term can help lower the interest rate. However, this usually results in a higher overall borrowing cost, as payments are spread across a longer period. Our September 2024 data highlights how the average APR changes with different loan terms.
With a pre-approved loan, the deal you see is the deal you get
When you apply for a loan, it’s not always clear what deal you’ll be offered or whether you’ll be accepted. But when you’re pre-approved for a loan you know the deal you see is the deal you’ll get – you’ll know where you stand, with information that will help you make the right choice
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Apply with confidence
When you’re pre-approved, the loan amount, duration and interest rate are all confirmed
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Tailored to you
When you know what you’ll be able to borrow and how much it will cost, you can choose a loan that’s right for you
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You’re in safe hands
This helps protect your credit score as you’re less likely to be rejected when you apply
Will base rate cuts make 12 month loans cheaper?
The Bank of England cut the base rate to 4.25% in May, which could make 12 month loans cheaper. Lower base rates reduce the cost of borrowing for lenders, who may pass those savings on through lower interest rates.
However, lenders don’t always adjust their rates straight away – and some might not change them at all.
So, while the rate cut is a positive sign for borrowers, it may take time for the impact on loan costs to be felt.
Why compare 12 month loans with MoneySuperMarket?
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It’s quick and simple
Answer a few questions about you and the loan you want. We’ll search the market to find great deals. Once you’ve found a deal you like, click through to the loan provider to apply
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Filter and compare
We have a wide range of 12 month loans for you to compare. You can also use our handy filters to hone in on your search and find the right deal for you
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Protect your credit score
Good news: when you compare loans with MoneySuperMarket, you don't have to worry about hurting your credit score as we'll only carry out a soft search.
Is a 12 month loan right for me?
A 1 year loan could be right for you if you need to borrow a small to medium amount and want to clear the debt quickly. It’s ideal for managing short-term expenses like car repairs or consolidating smaller debts, with less interest paid overall.
But it might not be right if the monthly repayments are too high for your budget. If you need to borrow a larger sum, a longer loan term could also make repayments more manageable.
How to apply for a 12 month loan with MoneySuperMarket
We’re here to help you find the right 12 month loan for your needs
Our expert says…
With interest rates starting to come down, we could see some more competitive deals on 12 month loans entering the market. That’s good news for borrowers looking to spread the cost of a purchase or consolidate debts over a shorter period.
However, it’s important to remember that, because the loan term is relatively short, monthly repayments can still be relatively high. The upside is you’ll pay off the balance faster and could save on interest overall compared to a longer-term loan. As always, make sure the repayments fit comfortably within your budget before applying.
Kara Gammell Personal Finance & Insurance Expert
What are the alternatives to 12 month loans?
If a 12 month loan isn’t for you, there could be other options, including:
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Overdrafts
Arranged overdrafts on current accounts typically allow you to borrow up to a certain amount or for a set period of time and not pay any interest. However, whether your bank will allow this will depend on your personal circumstances.
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Purchase credit cards
Purchase credit cards with low-interest rates are ideal for new purchases, helping you pay interest at a reduced rate compared to standard cards
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Guarantor loans
A guarantor loan can be an alternative if you’re struggling to get a credit card. With someone you trust backing your repayments, you may be able to borrow more or at a lower rate than you’d get on your own.
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Buy Now, Pay Later (BNPL)
Let you borrow with poor credit, but someone else must agree to repay if you can’t
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Credit union loans
Credit union loans often offer fair rates and flexible terms, especially for local community members
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Do 12 month loans require a credit check?
Yes, application for credit, whether a loan, a mortgage, a credit card, or even a current account with an overdraft facility, will involve a credit check from the product provider. If you’re concerned you have a low credit score that might mean your application is rejected or that you won’t be offered the best terms, you can take steps to improve your credit rating.
Can I get a 12 month loan with no guarantor?
Yes, just as with any other borrowing, as long as you pass the lender’s affordability checks you can get a 12 month loan with no guarantor. If you have a poor credit rating or no credit rating and feel you need a guarantor, there are specialist guarantor loans available.
Can I pay a 12 month loan back early?
Yes, you can usually pay off a 12 month loan early, but you are likely to face an early repayment charge.
The amount will depend on the conditions of the loan and you should weigh this up against any potential interest savings before making your decision.
What details will I need to apply for a 12 month loan?
You’ll need to provide your
Name and date of birth (you must be at least 18 years old)
Current address (and previous addresses covering the past three years)
Proof of income (details of your employment)
Bank details
Our step-by-step guide to making a loan application provides more information on how to apply.
Can I extend my 12 month loan term?
Most lenders won’t allow you to extend the loan term once agreed, but some may offer refinancing options. Be aware that this could increase the total amount you repay.
What happens if I miss a payment on my 12 month loan?
Missing a payment could damage your credit score and lead to late fees. Contact your lender as soon as possible if you're struggling to pay.
Can I get more than one 12 month loan at a time?
Technically yes, but taking out multiple loans can affect your credit score and affordability. Lenders may also reject applications if they think your debt level is too high.
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You might be wondering if we work with all the companies in the market, or if our commercial relationships with our partners might make us feature one company above another. We’ve got nothing to hide, and we want to give you clear answers when it comes to questions like these, so we’ve pulled together everything you need to know on this page.
Lenders
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Reviewed on 10 Dec 2025 by
Accurate as of September 2024
Accurate as of September 2024
Accurate as of September 2024
Accurate as of September 2024
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