Unsecured loans are generally seen as the second choice to the secured loan. When consumers aren't able to obtain the secured loan, they have little other choice. But a new type of loan, called the tenant loan, seeks to help out consumers in such situations by offering a compromise between the two loan types.
Borrowers can profit from the average tenant loan, simply because they can strike a better deal with lenders where they otherwise couldn't. Tenant loans work for those who own rental properties in which they currently live- perfect for anyone who doesn't own their own house or anyone who doesn't have proper collateral for secured loans. Whatever the case, tenant loans can be quite handy for reducing overhead costs.
The real benefit consumers get with a tenant loan is trust. As long as the prospective borrower has a clean line of payments under their belt, and no missed payments, they will usually have much to rejoice over with a tenant loan. This isn't to say that they will get good rates as observed with secured loans, but they will certainly be better than the average unsecured loan. In some cases, consumers even get rates comparable to that of secure loans regardless.
The real power in a tenant loan comes from the flexibility they exhibit. A tenant loan can range anywhere from a few months to decades in payment periods. The tenant loan can also have fixed or variable rates- although they commonly feature fixed rates for better stability for consumers. The interest rate corresponds quite nicely to the amount tenant loans can encompass- which can be anywhere from menial amounts to thousands of dollars. Because of their leniency, tenant loans are a big hit with anyone looking to obtain a loan.
The biggest benefactors of tenant loans are students, who fit the perfect demographic of people who would most need the tenant loan. Students are commonly plagues with little to no credit, and very seldom have their own house to use as collateral. As a result, students are prime targets for the tenant loan. And since most students rent apartments or houses, they shouldn't have much trouble in obtaining them.
Borrowers should take special note that not every lender was created equal. In fact, lenders will vary from one institution to the other. Finding the best rate is just a matter of visiting each facility and asking for the lowest rates in comparison to top competitors. Mentioning the fact that borrowers are shopping around will also help in obtaining cheaper rates, as the strain of competition is enforced on the lender.
Final Thoughts
The tenant loan is a fine choice for many practical applications- just be sure to plan one's budget accordingly so as to stay on top of the debt it can create. Be sure to ask for reviews of different lenders, investigate testimonials, and above all else- read every condition and term of agreement with diligence and care.
