Getting A Loan When You Re A Tenant

Getting A Loan When You Re A Tenant

Getting a​ Loan When You're a​ Tenant
Wherever we go these days we're bombarded with offers of​ credit,​ whether loans,​ credit cards,​ remortgages - there seems to​ be no end to​ the​ number of​ companies asking us to​ consider applying for finance through them .​
It's true that gaining credit is​ easier than ever before,​ a​ fact borne out by the​ record levels of​ personal debt we see revealed in​ survey after survey.
Whether or​ not you​ think borrowing is​ a​ good idea,​ a​ necessary evil,​ or​ to​ be avoided at​ all costs,​ in​ the​ modern world it's increasingly taken for granted and many feel that easy access to​ credit is​ almost a​ right.
The problem for many people is​ that getting approved for a​ loan is​ not as​ easy as​ it​ might at​ first appear .​
We've all heard about the​ problems encountered by people who have a​ poor credit rating for whatever reason,​ but there are millions of​ other people with no bad credit history on​ their files who nonetheless find it​ more difficult to​ arrange a​ loan.
Many of​ the​ loans advertised on​ TV,​ in​ the​ press and online are aimed solely at​ homeowners .​
These kind of​ loans are known as​ secured loans and are fairly easy to​ be approved for as​ the​ applicant agrees to​ put their home up as​ security for the​ loan .​
Indeed,​ with house prices at​ an​ all-time high,​ lenders are positively falling over themselves to​ extend credit to​ homeowners,​ knowing full well that the​ high equity levels enjoyed by people who took a​ mortgage out before the​ latest property boom make it​ very unlikely that the​ lender won't be able to​ recoup their loan somehow,​ even if​ the​ borrower fails to​ keep up with repayments.
This is​ of​ little help to​ people who don't own their home though,​ and for these people a​ different kind of​ loan is​ called for : a​ tenant loan.
A tenant loan is​ a​ different name for an​ unsecured loan,​ or​ a​ loan which is​ offered without the​ need for collateral to​ back up the​ repayments .​
This lack of​ collateral means that the​ loans are more risky for the​ lender,​ which makes them more difficult to​ be approved for.
The first difficulty tenants face in​ getting a​ loan is​ that the​ credit checks will be more stringent,​ and a​ higher proportion of​ people will be rejected .​
If you​ apply for an​ unsecured loan from a​ high street bank or​ one of​ the​ big name lenders,​ the​ chances are you'll need to​ boast a​ good to​ excellent credit record,​ with little or​ no history of​ missed payments,​ defaults,​ or​ recovery action .​
You'll also need a​ regular income from employment,​ and this income will need to​ be large enough to​ satisfy the​ lender that you'll have little trouble keeping up with the​ repayments.
Even if​ you​ satisfy these requirements,​ you​ may still find that you're offered a​ loan at​ a​ higher rate than the​ one you​ saw advertised.
But what's the​ outlook for tenants with less than perfect credit ratings? Are there loans available? It's best to​ be realistic and say that if​ you're not a​ homeowner and your credit rating is​ poor,​ then you're going to​ struggle to​ get an​ unsecured loan .​
There's still hope for tenants with a​ middling credit score though,​ and there are several companies who can help - do a​ search for 'tenant loans' on​ your favourite search engine and see what comes up.
The drawback in​ this kind of​ situation though is​ the​ price you'll have to​ pay for the​ loan .​
The interest rate or​ APR will be much higher than those you​ see splashed around in​ flashy adverts,​ and the​ amount you​ can borrow will probably not be as​ high as​ you'll expect either,​ but nevertheless if​ you're in​ urgent need of​ extra funds then a​ tenant loan may be worth applying for so long as​ you're aware of​ the​ downsides.

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