Usually the problems of tenancies were not enough that loan providers too have started treating tenants in a step motherly fashion. Such is the indifference of loan providers that it appears as though loan opportunities are all shut for the tenants. Since they do not have a home of their own, tenants are often eyed with suspicion. What if the tenant runs away after borrowing? Legal procedure sure offers a relief but it is often too protracted.However, all loan providers not view tenants in a similar fashion. It is these lenders who offer loans to tenant. Tenants are the people who do not have a home of their own. People who have been living till date in their parents' home too count as tenants, unless parents are ready to allow the usage of their home as collateral. A loan to serve the tenants is known as tenant loan in the UK.
UK tenant loan is mainly an unsecured loan where the borrower does not have to offer any collateral to the loan provider. Take any secured loan and the part of collateral will always come along. Whether it is the home of the borrower or any other asset which serves as a collateral, there is always the fear of the collateral being taken away permanently by the loan provider. How else do you think the loan provider will recover his loan? UK tenant loan is free of any such fears as there is no collateral.
There is some more advantage of tenant loan, which extends to Unsecured Loans in general, is that they are comparatively faster in getting approved. With no collateral to value, the loan providers can save important time during approval. Compare this with a secured loan against home and we find that the assessment of home takes as much time as the other processes taken together. Thus, if you are taking a tenant loan in the UK, you can hope to receive loan proceeds much faster than your counterpart who has taken a secured loan.
Compared to the previous times, the number of lenders with loans for tenants in the UK has increased. The lenders have realized that by taking a moderate risk they can increase their customer base.
Moreover, the interest rate on the UK tenant loan will be very high. As most of us know that rate of interest is heavily dependant on the amount of risk involved in a particular loan deal. We discussed in the very beginning of the low trustworthiness of tenants. This implies that the tenants expose loan providers to greater risk. Thus, tenants have to pay a higher rate of interest. The borrowers can escape interest rate fluctuations by using the several options that come on interest. Rate locks, capped rate, discounted rate etc form some of the interest options to lessen the bitterness of high interest rates.
With a bad credit score will not be accepted with ease in UK Tenant Loans. Credit history is the only instrument through which borrowers can trust borrowers. When credit history is tarnished, they will find it very difficult to make the lending decision. Credit deformities may have been ignored had there been sufficient collateral. Does this mean that tenants with bad credit history have to return empty-handed? They would have to return thus had it not been for a few loan providers who are ready to lend with this much risk.
There is no shortage of loan providers who try to take benefit of the trouble of the tenants. The loan is approved instantly once it is applied for. Tenants should go well prepared for the loan to take maximum benefits.
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