In the United Kingdom, tenant loans are defined as loans designed for those who do not own property, particularly housing or real estate. They are tenants and therefore one of the types of loans they may choose to seek are tenant loans. The loans are unsecured and usually come with a higher interest rate than secured loans.
In some ways, tenant loans are like credit cards. However, they are not a revolving line of credit. Rather, they are like any other type of installment loan, except they have no real property backing them up. Therefore, they are at somewhat of a higher risk than most types of traditional loans.
However, for some, tenant loans may have a big benefit over credit cards for those who are already experiencing a substantial amount of credit card debt. The loans usually come with a lower interest rate than credit cards. Due to this fact, some may decide using a tenant loan in order to retire credit card debt is a good option.
Borrowers can use the cash gained from tenant loans for almost any purpose. The bank or lender usually puts few restrictions on the money, though they may inquire as to what its primary use will be. It is considered a personal loan and therefore will be an agreement between the borrower and lender.
That agreement will do several different things. First, it will set the interest rate. Second, it will set the time for repayment. Third, it will usually note the monthly payment. Lastly, it will set forth any other conditions that are applied to the loan. This may include late fees, uses for the money and other such provisions.
Those with bad credit may find tenant loans are an option, at least in some cases. The loans may come at a higher interest rate than other seeking tenant loans, but they may be available. It is up to individual lenders as to what they may or may not accept.
The money available through tenant loans can be substantial. One Web site claims to offer loans from approximately $7,500 US Dollars (USD) to nearly $500,000 USD. While most loans fall in between these two numbers and some may even be for lesser amounts than these, it does show the wide range of options available. It may be possible to take 20 years or longer to pay off a tenant loan.