How Unsecured Loans for Tenants Can Make A Difference

Tapping into extra funds whenever needed is valuable when unexpected financial emergencies pop up. Homeowners tend to have an easier time getting even large loans because they have home equity. But unsecured loans for tenants and non-homeowners are tricker to get approval on.For the most part, lenders are more open than ever before to the idea of granting loan approval with no collateral, even to those with limited finances and poor credit histories.And the good news for those non-homeowners who are without any form of collateral, is that getting unsecured loans is no longer the impossibility is once seemed.What Are Tenant Loans?The availability of unsecured loans for tenants means emergency funds are accessible very quickly. In some cases, they can be used to clear rent arrears, but it is important to note than tenant loans are not just available people who rent their homes. Students and paying guests, as well as private and council tenants, qualify for these loans.What is more, the cash to be borrowed does not have to be spent on clearing any arrears. In fact, in many respects, they are just like any personal loan, with the funds able to be used for anything from paying for a vacation to making home improvements. The trick is getting loan approval with no collateral.There is nothing strange in getting the green light on a loan that is granted in the absence of any form of security. However, lenders offering unsecured loans are rarely as open to lending to non-homeowners. In that sense, these loans are of huge benefit to those who qualify.Criteria to MeetThe basic criteria for every applicant are pretty straightforward. It is only to be expected that an unsecured loan for tenants and other non-homeowners should place a condition relating to the source of income, especially since the absence of any form of security means the only way of regaining their investment is provided by the income of the borrower.With this in mind, lenders require applicants to prove they have a reliable source of income from a full-time employer. Usually, this means confirming that the job has been held for a minimum of 6 months before the date of the application. Getting loan approval with no collateral is never easy, but easing lender concerns by having a solid repayment source helps a lot.  Other criteria include confirmation of age (over 18), of citizenship or legal long-term residency, and the possession of an active bank account. This third point is important as it provides a way both to deposit funds (if approved) and to withdraw monthly repayments directly each due date. This means repayments on the unsecured loan are less likely be missed.Terms To Watch Out ForThe reality of unsecured loans for tenants is that they are designed to provide emergency funds to individuals. However, since these loans are not backed up by security, and are usually sought after by people with limited finances, the lenders are taking a risk. Therefore, the interest rate charged is higher than usual.The sums available range between $500 and $25,000, so getting loan approval with no collateral can make a real impact when dealing with existing debts, or financing a business project of some kind. And the repayment period can range between 6 months and 10 years, so there is a certain flexibility in the repayment schedule.However, remember that the longer the term the greater the amount if interest paid, while the shorter the term the bigger the monthly sum and, therefore, the greater the pressure on meeting repayments. So, with these unsecured loans, there are compromises to make.