Loans For Tenants

What is special about loans for tenants?

Individuals that once tried to get a short-term loan from a lender, one that was unsecured, often found themselves facing many rejection letters. Banks are not fond of lending money to people that do not own homes, or are not buying one and especially not to people with bad credit ratings. What many people were noticing in the UK was that tenants, despite having good jobs and excellent credit, were being denied for even the most miniscule short-term loan. This demand these types of loans increased dramatically, and recognizing that this was a niche that needed to be filled, many lenders started offering what are called tenant loans.

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What You Should Know About Tenant Loans

Loans for tenants are loans that are provided to people that are renting from others, not actual owners of property of any kind. These individuals that request loans are typically facing a temporary problem, specifically with their finances. They might have a family and they may have had unexpected bills arise. Once these were taken care of, they then found themselves without enough money to make it until the next paycheck. Very similar to payday loans available in other countries, tenant loans are structured in the same way. Some of them will require you to pay them off quite rapidly, sometimes by your next paycheck, whereas others will allow you to make monthly payments. There is also the problem of the lender not trusting the tenant which can easily be resolved by using someone called a guarantor.

Why Some Tenant Loans Require A Guarantor

Thinking from the perspective of the lending company, when they allow people to borrow their money, they expect to be paid back. Their assurance that they will get their money is based upon knowing that they are working with a competent person. If this individual that is requesting the money does not have good credit, and they are not able to show proof of ownership of a home, they may need to work with a guarantor that can help improve their chances of success. The guarantor is simply a person that is going to co-sign on the loan and share the responsibility of paying it back. In most cases, this is merely a formality because most borrowers will pay the loan and interest back to the lender on time.

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Borrowing money can be a difficult process for anyone, even if you are a homeowner. By working with a lender that will help tenants with short-term loans, any tenant in the UK can look forward to an unsecured loan that can help them out of a financial situation that they are facing. If you are facing this type of financial crisis, you should try to find a lender that offers tenant loans. If they do need a guarantor, it is likely that you will be able to work with someone that you know that can help you get the money that you need in the next few days from one of the reputable short term lenders in the UK.