We are all confronted with different financial challenges at the most unexpected times. You may need to borrow extra money to cover for larger expenditures such as vacation, home improvement, wedding, etc. Some people need to take out a loan for debt repayment.
While most lending companies offer secured loans or loans that require the submission of collateral, there are also lenders who are willing to extend loans without asking for collateral. Unsecured loans are also called tenant loans because even renters or non-homeowners can obtain them.
Unsecured Loans – Loans for Tenants
Without the submission of collateral, lenders will often determine a person’s credit worthiness based on his/her credit history and employment background. To qualify for a tenant loan, you will need to show proof of a stable employment and an active bank savings account in your name.
What is the difference between secured and unsecured loans? First, the rate of interest will vary depending on the lending company. Obviously, there is more risk involved so lenders will charge a higher interest rate per month for tenant loans. The maximum loan amount is also lower than secured loans.
What about the repayment terms? Since the interest rate is higher, you don’t want to get stuck with your repayment for a long time. Most lenders require a shorter repayment period to reduce the risk of default.
Other Prerequisites
What are the requirements to get approved for an unsecured tenant loan? As we have said, you need to have an active savings account as well as proof of steady income. Thus, your lender will at least have assurance that you will be able to keep up with your repayment obligations. Borrowers must also be of legal age (18 years and above) to get approved.
Some lending companies may require a high credit score to get approved while other lenders may have a more lenient credit standard. Yes, it is possible to get unsecured loans for bad credit but you can expect to pay for an even higher rate of interest and fees.
If you have a plan to get an unsecured tenant loan, spend time comparing lenders. You want to make sure that you understand the Terms and Conditions. Most tenant loans can be obtained online but you want to be certain that you are dealing with a legitimate and trusted lender before submitting an application.
About the Author
Sandra Thompson is a loan consultant with Unsecured Loans Now and has been providing consumers and business owners with Unsecured Loans since 1989. For years she has helped people with loan and credit problems especially pertaining to Unsecured Personal Loans, Business Loans and Unsecured Credit Cards. Copyright 2009.
