About Tenant Loans
Tenant Loans! What are they? Why do they exist? How do you get one? How much money can you get? Why get one?
All good questions and I will try and answer them for you today. First of all I believe an introduction to what this type of finance is would be an appropriate place to start. So, first of all…
What is a Tenant Loan?
A tenant loan is a financial service designed for people who do not own a property (house, flat, bungalow, manor, castle, etc) but pay rent instead. To be totally honest they are basically just unsecured loans under a different name, renamed to let tenants know that this type of loan is openly available for them. Often in today’s market other unsecured loans while not secured on a property are mainly offered only to homeowners.
Why you ask? Well because banks no longer like taking risks (not at the consumer level anyway). Even if they are offering loans unsecured by nature they still trust people with a property to be more in control of their finances. They learnt their lesson the hard way after the market crashed and not unfortunately they are tighter than ever on who they lend to.
How to Get a Tenant Loan?
You can get a tenant loan numerous different ways from applying online to visiting a local money shop, speaking to your bank, even looking through the phone book (do people still use the phone book?). Obviously the easiest way to gain access to a tenant loan is to search the internet. Although this will often unwillingly open you up to a world of underhand loan companies you never imagined could exist in such a regulated industry.
Dodgy Loan Companies? In 2012?
Yes. Unfortunately. How do they keep running? I am not sure. But they do. A lot of companies will consistently change their name so that they cannot be caught up with.
The way in which these companies make money is by taking your bank details on the promise of a loan. Taking out a large “broker fee” sometimes up to £100 and then they disappear, pass your details on to as many companies as they can in the hope that someone will give you a loan and you will not chase them for the extortionate fee they charged you.
Avoid these companies at all costs. They do not care about you, they want your money. No matter how well the sales agents spin it.
How Much Money Can You Get?
Good question and it varies depending on what type of tenant loan you apply for… Maybe I should cover the different types of tenant loan to give a more complete answer.
Type of Tenant Loans:
A very popular type of finance. These loans allow you to borrow usually up to £1000 on the basis you will pay it back the next time you get paid, generally within the month. Because the loan is short term the amount of interest charged is quite high. You can think of it simple as paying about £25 on every £100 that you borrow.
A guarantor loan is a more long term alternative to borrowing money as a tenant. You can get up to £5000 over a long loan term of 12 months all the way up to 5 years. The main unique point of a guarantor loan is that you need to have someone to back up your borrowing namely a homeowner that is a friend or family member. If you fail to make payments on time the guarantor will be required (and legally obliged) to step in and make the payment on your behalf. If you can find someone to support you then this type of loan can be very good. The interest rates are much lower than other tenant loan alternatives.
Bank loans are very hard to get unless you have a perfect credit history and a large amount of income. This should always be your first port of call when looking for an unsecured loan. If you cannot get a loan at the bank it is then worth looking at alternatives. Banks will generally lend you the most money at the lowest interest rates. Speak to your bank for more details.
Unsecured Loan Providers
There are still some surviving unsecured lenders on the market. Everyday Loans are an example in the UK. Their criteria is quite high now but they required no security. I believe they will currently offer up to £10000 at reasonable interest rates (around 20 – 50%).
Finally we have doorstep loans. This type of loan involves a loan agent coming round to your house on a weekly basis to pick up repayments. These are a good idea for short term loans and have a lower interest rate than the main alternatives payday loan. You can normally take up to £1000 over a year. You do need to have a doorstep agent in your area in order to take advantage of this type of loan so it is worth looking into different companies online.
So How Much Can I Get?
Looking at the different ypes of tenant loan available you can get anything from £50 all the way up to £25000. It purely depends on what type of loan you apply for.
Why Get a Tenant Loan?
Tenant loans can be used for numerous different reasons. Holidays, cars, Christmas, weddings, consolidation, anything you can think of within legal reasoning.
I hope this article has been helpful and you have learned something about tenants loans.