All About Tenant Loans

A tenant is a person who does not own their own property. A tenant may still live with their parents; rent privately or through a local authority or council and typically pays some kind of rent. The large majority of tenant loans are unsecured with the exception of log books loans which are secured against the applicants vehicle. Generally there are less borrowing options for tenants compared to homeowners, and many tenant loan lenders have either tightened criteria or pulled out the market since the onset of the credit crunch.

Tenant loans are typically only available for employed applicants who can prove their income through pay slips. All tenant applicants would also be required to provide proof of ID, such as a driving license or passport and some sort of proof of address, typically a recent utility bill. Some tenant loans are available through online lenders and websites making tenant loans quick and accessible. Other lenders require the applicant to go into a local branch similar to the traditional “high street bank lending”.

With rising rents and cost of living there is still significant demand for these loans, however there are some pitfalls that should be avoided. The recent decline in lenders has seen the emergence of a number of fee charging brokers who will ask the applicant for an upfront fee of up to £100 to process their application. Often the applicant is not found a loan and is left out of pocket. All tenants making a loan application should take precautions to make sure the company they apply to are legitimate and have the necessary licenses such a consumer credit license. Another pitfall to be avoided is high interest loans. As more traditional lenders have exited the market, newer forms of credit such as Payday loans have emerged as a borrowing solution. Often Payday Loans come with an APR of in excess of 1000%, and should only be considered if there are no other available lending alternatives.