Unsecured Loans For Tenants - Here's How To Apply Article

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Unsecured Loans For Tenants - Here's How To Apply

Anyone about to borrow money for the first time can suffer from a little nervousness but for tenants who don't have collateral behind them to make things a bit easier, the world can sometimes seem a lonely place. This article explores what you could do if you find yourself in this situation.

Author: Andy Silk

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When you're a tenant and you need to raise some finance for something special, it can sometimes feel like the world is against you. Finding a lender willing to consider your application can be almost an impossible job. Whilst it would be entirely understandable if you felt a deep sense of loneliness at this point, the fact is that there are thousands of people out there that are in exactly the same position. The good news is that there are quite a few of you that may still be able to get the loan you need.

So What Are Unsecured Loans?

Firstly, let's look at what makes unsecured loans different from other types of loans. As the name suggests, unsecured loans are not guaranteed to be repaid in the event of a default as with secured loans. Homeowners with a mortgage can use the equity they may have built up in their property as collateral in the event of a default so the lender may be quite happy to consider their application in the knowledge that if the customer defaults, they can still get their money back by forcing a sale of the property on which the loan is guaranteed.

In this way, you could argue that this type of loan is a safer bet for the borrower than for the lender and you would be exactly right which is why lenders take a good look at the likely risks involved in lending to a specific individual before agreeing the loan. They would probably draw up an income and expenditure account showing what spare monthly income may be available for the repayments after all the regular expenditure has been accounted for. They would also order a credit search from one of the major credit reference agencies such as Experian or Equifax.

Whenever you make an application for finance or you make a repayment on any credit that you have taken out, a record of it is created which is available to prospective lenders when you make an application for further finance.

As well as the frequency of finance applications and the repayments that you make being available for viewing, the credit file also shows when you have missed repayments, run in to arrears and have attracted CCJ's for non-payment. Canny borrowers always make a point of ensuring that they do not miss a repayment because of the significant adverse effects to their credit history.

Being Approved For Unsecured Loans

So, we have seen that having enough spare income and a clean credit history can make a significant difference to your ability to convince a lender that their investment is safe. The last thing they would want is for you to stop repaying the loan, as they would lose money. Even if they employed bailiffs and the services of solicitors to encourage you to pay or to remove some of your property in an attempt to recover some of their money, the chances are their costs may swallow all of any money they manage to recoup.

Unsecured loans and tenant loans are likely to carry a comparatively low level of profit as well since because of the additional risks faced by the lender, the amounts that you may be able to borrow in this way are lower than with secured loans. Lower advances which will probably be repaid over a shorter length of time mean less interest earned by the lender which however, on the other hand means that they will need a higher volume of loans to complete in order to make them viable.

Applying for unsecured loans and tenant loans is a pretty simple affair. Just fill out an enquiry form with an online broker and wait for their call. A loan consultant should be with you in a matter of minutes and you may get a decision in principle almost straight away. Don't forget that they will still require you to complete a written credit agreement and perhaps to prove your level of income, but this is a much simpler process than with secured loans and you should therefore hope to get the money you need within a couple of weeks rather than up to six weeks in the case of secured loans.

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About Author

Andy Silk is FinanceGuru for http://www.FeelGoodLoans.co.uk . He has had many years experience at a senior level within the finance industry and has written extensively on all aspects of personal finance. For more articles by Andy Silk together with financial hints, tips and a wealth of internet resources, visit the Finance News section of the website.

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