Unsecured Loans – The Advantages to Tenants and Homeowners

February 21, 2012 by  Filed under: Loans 

When someone mentions unsecured loans, most think of tenants and non-homeowners. However, they are also available to home-owners who simply do not want to risk losing their property if the loan defaults.

Unsecured loans were originally designed for tenants and those who do not own their own property. Since their introduction there have been a number of personal loans introduced to the world of finance, each of them advantageous for different situations.

One type of personal loan is a tenant loan, as the title suggests they are designed for tenants who are living in rented properties and therefore do not have a property to act as security for the loan. They do not require a guarantor however they do require the applicant to have reasonably good credit history

Another type of unsecured loan is a guarantor loan; these are specifically designed for those with poor credit, who have been turned away by their mainstream bank or building society. A guarantor loan requires the applicant to have a guarantor (homeowner) to support their application and guarantee the monthly repayments if the applicant fails to do so.

The most recent unsecured product on the market is the payday loan. This is a very short-term loan that offers only very small amounts of cash. They have very high approval rates and are usually approved or declined within 1 hour. The process is very fast meaning that there are very few checks and searches involved

Unsecured loans tend to offer amounts ranging from £50 to £25,000 over a term of a few days to 5 years. The interest rates tend to be higher than that of secured loans due to the risk involved to the lender and the type of customers they are dealing with.

Secured loans such as homeowner finance offer amounts ranging from £5,000 to £100,000 and the term can be anything from 1 to 50 years depending on the amount borrowed.

One of the advantages of unsecured loans is that they are available to those with poor credit and what’s more, by keeping up with the monthly repayments, it can then help to improve your credit history. Often the amount available to the borrower will be heavily reliant upon their credit history and the affordability of the monthly repayments.

In order to be approved for an unsecured loan you will need to provide proof of ID and proof of affordability. Most lenders will have a website with an online application form meaning that the processing time is fast and the amount of paperwork is small.

There is also a number of unsecured loan comparison websites available which will offer the most suitable loan based on the details entered by the applicant.

To learn more about Tenant Loans visit www.loans4tenants.com or read more articles by Jason C Scott

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