Tenant loans – until ten years or so ago, the only tenant loans you could really get were doorstep loans. Then the internet and smartphones came into our lives and turned the whole tenant loan market upside down. If you are a tenant and you need cash now, there’s more choice and competition out there than ever before.
Loan Princess help thousands of tenants every month to find the right tenant loan for them and their personal circumstances. And, in this article, our team look at the six biggest things you should consider, including:
• shopping around gets you a better deal
• why it really pays to check the small print
• could borrowing more actually work out better for you?
• secured or unsecured
• guarantor or no guarantor
• good credit history or bad credit history
Shop around and do your research
You wouldn’t go to a car showroom and not haggle. Likewise, if you’ve got a sales rep around from the local double glazing company wanting you to sign up to buy brand new windows from them, you’d push them down hard on price to make sure that you got the best possible price.
There are hundreds of companies in the UK licensed by the Financial Conduct Authority to offer tenant loans. There is huge competition out there for your business – it’s very much a borrower’s market. The best you can do when you need a loan is to shop around for one.
And that’s what we here at Loan Princess do – we shop around on your behalf. More on how we do that and the benefits to you later in this article.
Check the small print
With all loans, including tenant loans for bad credit, there are terms and conditions which you have to accept before a lender will send you the money that you need.
Ask yourself questions like:
• Does the loan whose rate you want to pay only apply to existing customers?
• Will you be unfairly penalised if you suddenly come into money and you want to pay back the loan early?
• Are you being offered payment protection insurance (yes – it still exists) but you don’t want to take it out?
• If you miss a repayment, how much will you be charged? In fact, what can you be charged extra for?
If you’re unsure about anything, the best thing you can do is to ask your lender or your broker – it’s in their interest that you’re a happy borrower who has all the information they need to make an informed decision before you decide to accept an offer.
Could you borrow more for a better rate?
No matter whether you’re borrowing £500 or £25,000, the costs of the lender of advertising (so that you apply to them and not to another lender) and processing applications are roughly the same. That means that, on loans of lower value, the interest rate is nearly always higher so that your lender has a chance of making the profit they want to make on their loan to you.
When applying for a loan, check to see if borrowing slightly more means that your monthly repayments end up being lower. You may very well be surprised by your results.
Secured or unsecured?
Loans are made which are either “secured” or “unsecured”. A secured loan means that you offer an asset of value to the lender which you may then have to forfeit if you can’t keep up repayments on that loan. The most famous type of secured loan is a mortgage – we’ve all seen the “your home is at risk if you do not keep up repayments on it” warning at the bottom of adverts.
Unsecured loans, like tenant loans, don’t require you to put up your home, car, or any other asset to borrow money. That’s good but, because there is increased risk to a lender of not getting their money back, the interest rates on unsecured loans tend to be significantly higher than on secured loans.
Guarantor or no guarantor?
You’ve probably seen the TV adverts for “guarantor” loans and you might have wondered just what they are. Put simply, a guarantor loan means that someone you love – normally a family member or a friend – guarantees the repayment of your loan if you can’t. This means they pick up the bill and you only need to read some of the newspaper headlines to realise what a mess this creates for people when a guarantor is actually forced to pay the loan back.
Here at Loan Princess, we don’t like guarantor loans because relationships lasting decades between family members and friends can be ruined by them. What makes it worse is that, in our experience, the vast majority of applicants for guarantor loans don’t actually need the guarantor to borrow money. We only offer tenant loans with no guarantor required.
That’s because there are specialist lenders who work with applicants who have either…
…good credit histories or bad credit histories
If you have a good credit history, it’s accurate to state that there are more options for tenant loans than for people with bad credit histories.
However, as we mentioned earlier in this article, there is no shortage of companies wanting to lend to people who have had financial problems in their past. The question most borrower is “how do I find a lender who offers tenant loans for bad credit applicants?”
Loan Princess is your guide through the maze of tenant loans for bad credit applicants
Loan Princess is a broker – what we do is to propose tenant loans for bad credit applicants only to the lenders who are happy to offer these types of loan.
For the lender, what’s the advantage? Instead of processing hundreds of applicants every day from borrowers who don’t meet their lending criteria, we hand-pick the most suitable applicants and we present those applications with the details a lender needs to make a positive decision.
For the borrower, what’s the advantage? Instead of spending hours making applications direct to lenders where a borrower has no idea whether they meet a lender’s criteria (this information is rarely shown on lenders’ websites), they make one application safe in the knowledge that we’re only going to be sending their details to lenders in their market.
When we do find you a deal, we tell you everything you need to know to make the decision that’s right for you. Our service is free and you’re under no obligation to accept the loan deal we find for you.
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