Tenant loans were non-existent not that long ago. The rapid development of the credit industry in the UK has contributed to an influx in new loan products and wider spread acceptance of borrowers. Among the new inventions of the modern credit sector, the tenant loans have perhaps helped the most number of consumers. This loan product has made it much more efficient for people renting homes or living with their parents, to obtain a loan at a reasonable cost.
Homeowners have long had the ability to obtain low cost financing because of their ability to secure loans with assets, namely their property. This collateral lowers lender risk and causes them to be more favorable with loan rates and terms. However, home renters do not have much collateral to offer in exchange for a large sum loan amount. This long restricted tenants from having access to anything beyond credit cards or small personal loans.
However, the expansion of the internet and the growth in competition among lenders has prompted the strong rise in tenant loans. Tenant loans are unsecured loans awarded to non homeowners who do not have to offer property as security to obtain the loan. They simply benefit from the responsibility demonstrated through their tenant performance and other financial factors. A consumer's financial background and credit score, as well as their loan parameters dictate what type of loan products they find.
Tenants can now more easily search through independent broker sites to get the best tenant loan offers available to them. The increased competition for tenant business has caused lenders to offer more favorable rates for these unsecured products. Typical variable rates range from seven to 18 per cent with repayment periods from a few years, up to 25 years.
The development of the tenant loan credit sector has actually contributed to a rise in renting among Brits. The high costs of buying a home and moving into that home, coupled with affordable renter loans has enticed some to avoid jumping into a home purchase in recent years. Additionally, bad credit borrowers have often found it much easier to get tenant loan financing than homeowner loans. The tenant loan process is easy to complete, and efficient to fulfill. Lenders often offer products within 24-48 hours of application and restrictions of hindrances to loans are fairly limited. Virtually any type of borrower can find some loan product.