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For the longest time, tenant loans used to be really difficult for people to successfully apply for. Back in the day, lenders were really risk-averse only wanting to work with borrowers who owned homes, drove a nice car, and sent their kids off to private school. Thankfully, around about 20 years ago, the finance industry started to wake up and they realised that there were millions of Brits out there they could lend to who didn’t own a home and who had a less than perfect credit record. And ever since then, there’s been a lot of competition as finance companies started to offer more and more loans for tenants.
Most tenant loans today are online tenant loans – you don’t need to sit down for a 30-minute appointment with a bank manager who knows nothing about you or your personal circumstances to apply. Tenant loans are something that most borrowers apply for over the internet, it can take less than a minute to get a decision and, if it’s a “yes”, then, depending on who you bank with, the money might even be there within an hour. That is the reason they’re also sometimes called as same day tenant loans.
But with so many lenders offering so many different products out there, how do you compare tenant loans? Where do you go to find the best tenant loans?
In this article, LoanTube looks at how tenant loans in the UK work.
Personal Loan for Tenants in the UK
There are more tenants borrowing money than ever before. A big reason for that is because the value of British homes has tripled in 21 years making the dream of owning your own house or apartment a very difficult dream to achieve for many people. Did you know that the average age of a first-time buyer is now 34?
Twenty years ago, tenants used to be young men and women making their first steps into the world of work. Now, many tenants are experienced, professional people for whom the chance of raising a deposit on a home is small, even though they would be paying less in mortgage repayments than they would in rent. Knight Frank statistics have shown that 32.3% of 34-49-year-old rent as opposed to 31.5% of people between 25 and 54 (source: Simply Business).
So, what do you need to do to qualify for an unsecured tenant loan?
The criteria for lending money to tenants is not that different from the criteria used to decide whether a finance company would lend money to a homeowner. Tenant loan providers want to see a steady income, they want to know that you can meet all of the repayments on time and in full (via an affordability assessment), and they will want to examine your credit report.
You might have heard that there are some no credit check tenant loan providers in the UK but that’s just not true. All lenders and brokers in the UK are licenced by the Financial Conduct Authority and it’s a condition of getting that licence that both affordability and credit checks are carried out on an applicant by the lender.
You can borrow from as little as £1,000 with a tenant loan right up to £35,000 paying your loan back over a period as short as 12 months which can extend up to 7 years. You can use the loan for anything except investing in a business (either start-up or established) or making a financial investment (stocks, shares, cryptocurrency, and so on).
No Guarantor Tenant Loans and No Security Required
Many homeowners, if they need money, decide to take out a secured personal loan. If they fall behind on a loan and the loan goes into default, the lender will have the right to sell the borrower’s home and use the money to pay the outstanding amount of the loan off. Though the interest rate on secured loans is often cheaper than with a loan where you don’t have to offer any security. Why take the risk?
Likewise, many tenants decide to use their car as security with a “logbook loan”. When you take out a logbook loan, ownership of your car passes to the logbook loan company. Ownership of the car only returns to you if you pay the loan off in full. For many families and tenants, life would be impossible without a car, so this is a course of action we’d recommend you think very seriously about before applying for one.
Who Can Take Out a Tenant Loan Online?
Anyone who doesn’t have a mortgage. That means that you could be living with your parents or other family members, renting a flat on your home, or sharing a property with other people. The place you’re renting could be in the private sector or it could be from a council or housing association. Here at LoanTube, we work with some of Britain’s best known lenders offering a wide range of great deals on tenant loans.
LoanTube is not a lender – we’re actually a broker. When you apply through us, we’ll match the details you tell us on your application form together with your credit report to the lender or lenders most likely to want to work with you.
Our service is free and there’s no obligation to take out any loan we’ve found for you.
To start your application, please click here.