Tag Archives: payback

Unsecured loans for tenants – The only option for non-homeowners

Tenants (council tenants, housing association tenants, private property tenants or folks living with their parents like student) are people who do not have their own house or residential property and live in somebody else’s house. As tenants are incapable of pledging collateral, the only option left for them is unsecured loans. Though primarily designed for tenants, these loans can also be availed by homeowners or property owners, as they may not be willing to get into property related legalities or risk his property for a small amount.

It is a known fact that homeowners or property owners can easily take advantage of their assets to get favourable loan deals like quick attention, high credit limit, competitive low APR, flexible payback terms and negotiable loan conditions. However, tenants miss out on most of that. Typically, unsecured loans for tenants are a bit expensive – low credit limit, comparatively high APR, fixed payback terms and non-negotiable loan conditions. However, these loans have other advantages that are not there with secured loans like:

  • No collateral – no deposit against the loan amount
  • Less paperwork – no red tape
  • Quick service – fast loan processing
  • No immediate risks in the event of repeated defaults or non-repayment

    Unsecured loans for tenants are also ideal for people who have small monetary requirements, as offering collateral may not be necessary and for people who have urgent needs, as getting into lengthy property evaluation procedures may not be feasible.

    These loans can be used for a variety low credit requirements – new or used car purchase, education or career development plans, wedding expenses, home improvement plans, vacation and holiday season expenses, business requirements, debt consolidation, bad credit, etc. As with most loans, unsecured loans for tenants too have basic eligibility criteria. A person applying for this loan should:

  • Have a savings account in the UK to which he makes regular payments
  • Be in a full time employment
  • Have lived at his current address for over a year
  • Have made regular rent payments (not applicable in case of those living with their parents)

    Please note: The basic criteria to avail an unsecured loan for tenant is – credit history and DTI ratio. In addition, the APR may vary according to the type and amount of loan required, and desired payback scheme and period. Generally, an unsecured loan for tenant has an amount range of £500 to £15,000; an APR range of 7.4% to 41 % Variable (typical rate is 19.9% APR Variable) and a compensation term up to 10 years. A typical unsecured loan for tenants deal may look like:

  • Amount borrowed & 8594; £5,000
  • Payback duration & 8594; over 60 months
  • APR (Average Percentage Rate) & 8594; 8.3%
  • EMI (Estimated Monthly Instalment) & 8594; £101.59
  • Total payback amount & 8594; £6,094.94
  • Debt consolidation loans – A stable solution for wobbly finances

    In the past couple of years, there has been a considerable increase in the number of people seeking debt advice and deals. With monetary liabilities reaching an exorbitant level, the British have emerged as the biggest borrowers in the World. In fact, one study indicates that through credit cards, mortgages and other loans, the UK people have racked up combined debts close to a trillion pounds. Furthermore, quite a few of them are families who are spending more than 50% of their annual income on debt repayments.

    So, what compels people to take multiple loans and get into multiple debts? Well, the reasons are many – the rising cost of living and changing business trends, lifestyle necessities and demands, bad decisions and mismanagement of funds, etc. We all know that with multiple payback schedules, the possibility of missing one or more repayments is high. Hence, managing several debts is not easy… One needs to be very vigilant to elude the possibility of a default.

    This calls for an organised and efficient plan like debt consolidation, which is an efficient way to rearrange messed-up finances and bring them back on track. The credit bazaar offers a dexterous way to consolidate multiple arrears – consolidation loans. These loans help loan seekers to pay off all their debts in one go… Hence, they are perfect for people who are looking for a plan to pay off compound debts easily and become debt-free ASAP.

    Debt consolidation loans reduce their overall pressure by:

    Merging multiple monthly payments into a single payment Compressing varying monthly interest rates into one interest rate Not having to deal with diverse payback plans and multiple lenders

    Please note: Debt consolidation loans fuses the overall financial pressure but may not reduce the overall payback amount, as the success of availing it depends on the type of loans one consolidates. It is the most effective solution for financial products with heavy interest rates.

    For example, the consolidation of multiple credit card debts will always prove to be cheaper, as credit cards have high interest rates. Also, try to choose a deal that reduces the overall loan price and payback period as compared to the existing debts.

    The sub-types of consolidation loans are:

    Secured consolidation loans: Are ideal for homeowners and property owners, as they require collateral against the loan amount. Presence of collateral means low APR and negotiable pay back terms and loan clauses. Hence, they are best suited for clearing larger debts.

    Unsecured consolidation loans: Are ideal for all (tenants, homeowners, property owners and people living with their parents like students), as they do not require collateral against the loan amount. Absence of collateral means high APR and virtually non-negotiable payback terms and loans conditions. Hence, they are best suited for clearing smaller debts.

    The aim of debt consolidation loans is to help people along the road to a better financial status. So, choose wisely and keep up with the payments on the consolidation loan to obtain a good credit rating.