Who
should use it?
Tenant loans are useful for people who are not homeowners
that is they are tenants, students, paying guests etc.
As a loan option tenant loans are good for people who
are financially sound enough to make timely repayments
but don’t own a property.
What are its advantages and disadvantages?
Advantages:
- Since the borrower is not offering any collateral
to the lender there is no risk of losing any property
or asset.
- It being an unsecured loan involves no valuation
of property and hence takes less time to process.
- They are very useful to people who are not homeowners
although the interest rates would be a bit on the
higher side.
Disadvantages:
- Since there is no security or collateral involved
the interest rates are higher than that of the secured
loans.
- The lenders want to get their money back as soon
as possible and hence the loan term is kept short
and the installments large.
- The loan amount offered by the lenders is less
as there is no collateral from the borrower.
How can they be used?
The borrowers can use the loan for buying a car, use
it for educational expenses, home improvements, holiday
etc. There is absolutely no limit on what use the borrowers
put these loans to. They can be used even for debt consolidation
that is if the borrower has a past loan which he/she
is finding difficult to repay a tenant loan can be of
help. This would enable the borrower to repay all the
loan installments in a single installment. So the borrower
is saved of the hassles of paying for each loan individually
and hence less chance of missing an installment.
Lenders normally put the following requirements
for extending tenant loans:
- The borrower should be in full time employment.
- Sufficient identification and residential proofs
should be there. (e.g. utility bills)
- A home telephone connection/ in case of a mobile
phone the agreement proof would be required
- Borrower’s bank account should have direct
debit facility.
- The pay slips should be computer generated
The lenders also look at the employment history and
number of years spent in the last place of accommodation
while processing these loans.
A last word….
The borrowers should inquire about the protected payment
plan’s availability with the lender. With a protected
payment plan the borrower’s loan is taken care
of in case of emergencies like death, disability etc.
The borrowers should use the online option for browsing
the various loans and the terms of such loans.
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