The tenant would enter into an agreement with the lender as to what the monthly repayments are, and what interest rates apply. Because the loan is unsecured, no assets are fixed to the loan, so the lender considers the repaying capacity of the tenant, as well as the state of their credit. The monthly income of the tenant forms the basis on which the loans are granted.
Unsecured loans are not exclusively for tenants, as homeowners are now increasingly opting for unsecured loans as a result of the rising number of repossession incidences caused by missing repayments on secured loans.
Self-employed or those with a salary who’re able to repay a loan with their incomes also qualify for unsecured tenant loans.
Unlike secured loans, unsecured tenant loans can be acquired very quickly, since there’s no evaluation of the property, and therefore a lot of time and paperwork is saved resulting in quick processing of the loan.
The downside to unsecured tenant loans is that they attract a higher interest rate as a result of the absence of collateral, when compared to secured loans. Unsecured tenant loans generally do not allow the borrowers to get big loan amounts and the repayment term is also relatively shorter.
You can find out more information regarding Unsecured Tenant Loans here: Tenant Loans and Tenant Loan
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Source: http://www.articlealley.com/article_126631_19.html
Source: http://www.articlealley.com/article_126631_19.html
