While homeowners may find it hard to get the loans they want at the terms they prefer, those of us who do not own property face our own problems. A large number of people still rent their residences, and this has a definite effect on their loan applications. The good news is that there are unsecured loans for tenants available, ensuring financing options exist for that niche too.
The problem is that tenants are not property owners, so are perceived to have no collateral or security. But as with all loans, the key issue is affordability. Securing affordable tenant financing is not that difficult if the right lender is approached, and the application is strong and in proper order.
But there are conditions to getting an unsecured loan approved that all tenants should keep in mind.
What Are Tenant Loans?
The key problem for most tenants and non-homeowners is a lack of assets. It means that collateral is usually a difficult thing to find, thus making loan approval difficult to get. This is the vacuum that unsecured loans for tenants are designed to fill, providing those with no property access to much-needed funds.
The issue for lenders is that because people with no property, or no home of their own, have no equity and little likelihood of having meaningful collateral, they are high risk borrowers. As a result, unreasonably high interest rates are often charged, making a loan even less affordable for the applicant. But with so many people living in rented accommodation, demand for affordable tenant financing is high.
Loan limits can reach as high as $5,000, though another unsecured loan option is a guarantor loan which, with the benefit of a qualifying cosigner, can be as high as $15,000. The purpose, meanwhile, can be anything, including buying a car, financing a vacation or even consolidating existing debts.
Qualifying for Tenant Loan
The basic criteria required to qualify for an unsecured loan for tenants are the same as any other loans. Applicants must be over the age of 18, be a US citizen or legal long-term resident, and must have a source of income. The only other stipulation is that they be currently renting a property.
Other criteria needed to qualify is that there be no recent history of loan defaulting (over previous 24 months) or of bankruptcy, while it may be necessary to provide proof of income also. Getting affordable tenant financing will usually mean providing concrete proof of income too, showing there is enough excess to meet repayments.
For large sums, from $10,000 to $25,000, it is also possible to get a guarantor, but this depends on the flexibility of the lender. Some are strict and have a firm limit of around $10,000. However, others are willing to extend the unsecured loan limit if the guarantor has an excellent credit history.
Normally, the best loan options are to be found online, with a variety of online lenders offering loan packages with the lowest interest rates and most flexible repayment terms. It is no different when it comes to unsecured loans for tenants and other non-homeowners. The application process itself is simple, with basic information required on an online form, and it is normal to have an advisor answering queries while the form is being filled in.
There is, of course, a security issue when providing financial information online, so be sure to check any prospective lender out on either the Better Business Bureau or Verify1st sites. But even if the lender is safe, the issue of fees and charges must be considered. Affordable tenant financing is available, but online quotations should be free. So, read the fine details of the contract and invoice to make sure everything about the unsecured loan is above board.