The Debt Advice Online Blog

If you do not own your own home then your options are cut down when it comes to borrowing money because you cannot obtain a secured loan. You need to own your own home in order to be granted secured debt, but what if your credit is poor or could be better? If this is the case then you are likely to get turned down for unsecured loans and credit cards, despite the fact that you are struggling financially and a loan would be a welcome cash boost. However, the financial market is not as rigid as it once was in that where there is demand, you can guarantee that there are products on offer to fulfil it. In more simple terms, if you have a financial need then you can guarantee that there is a product out there for you. This is where the tenant loan comes in!

The tenant loan is a product on offer to private and council tenants alike. You can obtain a tenants loan even if you are living with your parents or lodging with a friend and need something, such as a car. The whole point of a tenant loan is to offer a financial solution to those individuals that do not own their own home or indeed any property to secure a loan against. As such, they are unsecured and can indeed offer you the amount you need. However, before you look any further into the possibility of a tenant loan, there are some things that you need to know about them and the lending companies that offer them:

• Interest rates are higher for tenant loans than secured loans, but the rates tend to depend on the nature of the loan and your credit rating. In general, the worse your credit rating, the more interest you are likely to be charged as a result. Those offered to individuals with excellent or good credit scoring can dip below 10%, but loans for those with poor credit ratings are usually nearer the 17% to 25% mark.
• Some companies offering tenant loans do tend to have strict eligibility criteria, meaning that you have to fit into a specific group in order to benefit. For example, the lenders that are not prepared to take a chance on those individuals with bad credit will not allow a scoring of any less than good in terms of eligibility. Others require that you have been in your current employment for more than two years. Then there are those that actually require a certain level of income before they will loan money to ensure that you can meet your financial obligations and repay the debt.
• Tenant loans are available to the self-employed. Some companies will loan to those individuals that own their own business and can prove their income from the last tax year. They may ask to see your account and other documentation that can back up your income estimates, but they will take a chance if everything checks out.
• If you have CCJs and defaults against your name, there are companies that will offer you a tenant loan, but you do have to look for specialist companies if this applies to you because many high street banks and lenders will not consider those with such things against their name. It is considered too much of a risk for most.

Finally, tenant loans come in many forms, although the most popular is the any purpose loan. This is obviously available for any purpose, such as a holiday, car or debt consolidation for example. Some are more short terms loans that are designed to cover a period of time rather than a more ongoing item/period. For example, lending for Christmas comes into this category.