Tenants can sometimes have a hard job in getting a loan at the best of times (although to be fair, it can depend on where you apply) and if they have a level of adverse credit as well, they might as well not bother asking, right? While not our view, it is a commonly held belief amongst many tenants looking to raise finance but why should it be this way?



Firstly, let's take a look at why tenants sometimes find it difficult to get a loan. When you are renting your home, you don't have a property that you could potentially use as collateral against a loan. There are many lenders that focus their attention on homeowners alone. They want the added security that collateral affords. The deal works like this; the homeowner with a mortgage applies to a lender for a loan. The lender works out what level of equity exists in the property and by analysing the financial circumstances of the customer, they work out what risk they may face in lending and set a ceiling on the amount of money that they are prepared to lend which, in most cases is less than the difference between existing secured lending (mortgage plus any existing secured loans) and the value of the property. In this way, if the borrower defaults, in the worst case scenario, the lender can enforce a sale of the property to reclaim their investment.

With a tenant, this is simply not possible as there is no property to secure the loan against in the first place, which means that only unsecured loans for tenants and tenant loans are possible. As far as unsecured loans for tenants and tenant loans are concerned, only specialist lenders are interested in this type of loan so it's not always a good idea to apply to just anyone if this is the type of loan you need.

If you have adverse, e.g. arrears, this means that you potentially pose a higher risk to the lender than if your credit record was unblemished, for obvious reasons. This could also reduce the number of lenders available to you and potentially reduce the amount they are willing to lend (or risk, as the case may be). It's no use trying to hide the fact either. The lender will ask and it is an offence to give a false statement when applying for finance. Equally, the lender will ask your permission to examine your credit file and if you refuse, they will be very unlikely to go any further with your application on the grounds that they cannot fully assess your circumstances.

One of the most popular ways to apply for unsecured loans for tenants and tenant loans is through an online finance broker as they often have access to a wide range of financial lending products from a broad spectrum of lenders, one of whom might be just right for you and your needs. With only one enquiry to them, they will do all of the legwork in going to all of the lenders on their panel so you don't need to do any more searching. Just answer a few simple questions and sign and return the written credit agreement when it comes out in the post and that's pretty much it. Unsecured loans for tenants and tenant loans are quite easy to apply for in this respect and you could be receiving a cheque in only a few working days from making your initial enquiry. Job done!

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