Natural enough question isnt it? I expect that like many people who are looking to borrow money, they not only have something special in mind for the money they wish to borrow, but they know the cost of that item down to the last penny. It could be for something like a new car, motorbike or caravan, a holiday for all the family in a far off destination, a wedding with all the trimmings or even just to clear your existing credit and convert all your loans and credit arrangements into one more manageable monthly repayment. Whatever you have in mind, your next step is to arrange the loan with a lender or finance broker.
Unsecured loans for tenants and tenant loans are specialised types of loans that cater for people who want to borrow money for personal use (rather than commercial or business use) but who dont own their own property to use as collateral against the loan. These secured loans or remortgages will use some of the equity a homeowner has built up in their property over time and provide access to potentially considerable sums of money. With unsecured loans for tenants and tenant loans however, there is no property to use to secure the loan against and whilst this arguably makes the whole transaction much simpler in principle, it can make things more difficult if you need to borrow a larger sum of money.
Unsecured loans for tenants and tenant loans are really only designed for people who need to borrow between £500 and £15,000 unlike secured loans where you could potentially look to borrow somewhere between £3,000 and £250,000. The key difference between the two is that with unsecured loans for tenants and tenant loans, you are effectively asking the lender to support you without providing any level of security in real terms. Oh, and before you ask; yes, homeowners sometimes default on their loan repayments as well as tenants. The difference between a secured loan and an unsecured loan is that if you default on your loan as a tenant, the lender has much more difficulty in getting their money back than if you are a homeowner where the lender could insist on a sale of your property to get hold of their funds.
A lender will want to judge the relative risk when they lend money to you and as is very likely, your financial circumstances may be very difficult from those of other applicants. Your income might be more or less, you have moved house more or less times or you have run into arrears more or less times than another person. These are just a few of the variances and each one could make a material difference to whether the lender is prepared to accept your application and grant you the loan.
The lender will always try to help as well on this one but never borrow more than you can afford to pay back and always at least consider taking out insurance on the loan to guard against accident, sickness and unemployment where your earning potential and your ability to repay the loan could be severely limited. This will meet the loan repayments for you without you falling into the red and affords you all the security you will need. Happy hunting!
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