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Taking out a loan if you're a tenant
Getting accepted for credit isn’t always easy, especially if you don’t really have any history of borrowing or if you’ve had problems with credit in the past. It can sometimes seem that homeowners can get accepted for loans and credit cards more easily – that’s because lenders can see they’re managing credit responsibly already.
So what does that mean for you if you’re a renter? Is getting a loan out of the question entirely? Don’t worry, you could still get accepted for a loan – let’s take a look at your options.
Getting a loan
With homeowner loans – also known as secured loans – the clue’s in the name. These types of loans are only suitable for people who own their own home, so if you’re a renter, you won’t be able to get one. They generally offer favourable interest rates as the lender accepts the borrower’s home as ‘collateral’ – meaning if you don’t pay it back, your home could end up being repossessed.
If you’re a renter, you could instead apply for an unsecured personal loan. You might have heard these referred to as ‘tenant loans’ - that’s because they’re suitable for renters as well as homeowners. You don’t need to offer any security up for these loans, so you won’t be at risk of losing your home, and this also generally means they’re quicker to apply for as well. However, as the lender doesn’t have any security if you default on your payments, the interest rate is could be higher than on secured loans.
Thought about an Ocean personal loan?
- Start from £2,000 - £5,000 - Easy to apply - Loans available from 2-4 years.
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Lending with bad credit
It may be possible to get a personal loan even if you have had problems with borrowing in the past. If you have struggled with managing credit – for example making late payments or even missing them altogether, or if you’ve had CCJs or defaults in the past – this will show on your credit history for six years. Lenders use your credit history to make a decision on whether to lend to you. If they see a lot of problems, they could be more likely to turn you down.
If your credit history is less than perfect we could help you find a loan designed for people with bad credit that you may be accepted for. We’ll search to find the best deals available for your situation, and you may be able to borrow between £2,000 and £5,000 at a rate of 44.9% APR Representative. The application process is quick and simple and you’ll get a decision almost instantly, so you’ll never be left hanging.
It’s important not to borrow more than you’ll be able to afford to repay – failure to make your repayments could lead to serious debt problems and your credit history being affected for up to six years.