If you rent property, then you might think that it is hard to get hold of a good loan. However, this is simply not true anymore, and personal loans for tenants are increasingly popular. If you are a tenant and want more information on how to get a tenant loan, then this article might have some information that can help you.
What are tenant loans?
Tenant loans are often referred to as unsecured personal loans or non-homeowner loans. They are for people who do not have the collateral of property to secure against a loan amount. With house prices increasing, many people are renting property instead. Lenders have noticed this trend and are offering more and more competitive loan terms to people who do not own property.
Criteria for a tenant loan
Instead of securing the loan amount against your home, you need to prove to the lender that you are able to pay back the loan amount. This is done by reviewing your credit rating and employment details. If you have a good credit rating and have paid back all your debts on time before, and you are also in stable full-time employment, you should be able to get a loan. The amount you can borrow will obviously depend on your earnings and your credit history. The more you earn and the lower risk you are to the lender, the more you will be able to borrow. However, usually you can borrow between ?500 and ?10,000 over a period of 1 to 7 years.
Costs of a tenant loan
Obviously, because the lender does not have the added security of property against the loan, interest rates are generally higher than for homeowner loans. However, if you shop around you can get rates that are very good, which will help to keep the amount of interest you pay to a reasonable amount. Somewhere in the region of 7-10% is a good figure to look for when trying to get a tenant loan.
Poor credit rating problems
If you have poor credit or are self-employed, then getting a tenant loan will be harder. However, it is not impossible to get a loan at a good rate, even if you have poor credit. As long as you can prove to the lender that you are not a huge risk, you should be successful. There are companies that specialise in tenant loans for people with poor credit, but the rates they charge are often higher. Your best bet is to shop around online to find a good deal.
Fast to get hold of
Although you might not be able to borrow as much as you would with a homeowner loan, tenant loans do have the advantage of being quick to get hold of. Many online companies allow you to fill in your details online, and because there is no need to value your property you can have the loan in a matter of days or even hours. If you rent property, then consider getting a homeowner loan to cover your financial needs.
Tenant loans, being an orthodox unsecured loan, the time that it consumes between applying for the loan and the lender paying out your loan cheque will be very shorter than that of a conventional secured loan. The reason is having less verifications and ‘red tape’ for the lender to come across.
Basically, tenant loans are ideal for council tenants, private tenants, and housing association tenants or for people living with their parents. Tenant loans can be used for multiple reasons like from buying car to funding your education or long holiday hiatus.
The pitfalls of tenant loans are high rate of interest. Since this loan doesn’t cover any risk, its interest rates are on the wrong side. Tenant loans can’t be borrowed for a larger amount. The loan amount borrowed through tenant loans can serve small needs only.
A bad credit can’t stop you from getting tenants loan. If you have been served a notice from county court or you have filed an insolvency case and requested for individual voluntary arrangements, even then you can get bad credit tenant loans. Such loans provide you an opportunity to improvise your bad credit score.
You need to search through Internet extensively, there are probabilities that you can get a suitable tenant loans.
Both Peter J Kenny & Carleton Carl are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Peter J Kenny has sinced written about articles on various topics from Credit Cards, Finances and Banking. Peter Kenny is a writer for The Thrifty Scot Please visit us at and. Peter J Kenny's top article generates over 22200 views. to your Favourites.
Carleton Carl has sinced written about articles on various topics from Debts Loans, Car Loans and Debts Loans. The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. He has done his masters in Business Administration and is currently assisting UK Loan Market as a finance specialis. Carleton Carl's top article generates over 49500 views. to your Favourites.