Tenant Loans: Loans for Non-Homeowners.
A tenant loan is just another name of unsecured personal loan.
It means unsecured personal loan and a tenant loan is
one and same thing. Tenant loan is basically designed
for borrowers who do not have their own home.
Usually,
it is very easy to borrow money from lenders by offering
collateral. At time, people who do not have any asset
to offer as collateral face problem in getting loan. Keeping
this in mind, tenant loan was designed. Tenant loans are
a way to borrow loan for those people who rent their accommodation
from the council or a private landlord or stay with parents
to apply for a loan. Tenant loan, an unsecured loan, is
easy to borrow, because you do not need to own a property
to use as collateral on the loan. Even a homeowner who
does not want to offer his home as collateral can also
borrow a tenant loan. Unsecured loans are a good loan
option for people who are financially stable and able
to keep up loan repayments, and who may or may not own
their own property.
The other advantage of tenant loan is that it can be used for any purpose-whether you want to buy a new car, want to go for debt consolidation or to improve your home, it can be sued for virtually anything.
Though loan amount in case of tenant loan varies from lender to lender, most often it is upto £50,000, which can be paid back over a period upto 25 years or as agreed by the lender and borrower.
To borrow a tenant loan, you should have a permanent source of income through either a job or through self-employment. You should also have a checking account. You may also need to provide a residence proof and an identification proof. Some lenders require that the borrower should have stayed for at least three years at the residence, from where he intends to borrow tenant loan.
However, a point of concern is that since tenant loan is an unsecured loan, the interest rate to be charged may be higher than other loan, in which you are required to offer your home as a security. Since, in case of secured loans, the lenders’ do not have much risk, they offer a lower interest rate. This is just opposite in case of tenant loan, where in due to its being unsecured, so higher risk for lender, therefore they charge a little higher interest rate to compensate their increased risk.
