4 Tips to Get the Best Tenant Loan Rates

You can get competitive tenant loan rates with good or no credit history and even improve your chances of keeping rates down with bad credit. Tenant loans are popular in the United Kingdom where homeowners and car owners are a smaller percent of the general population.

Good Credit, Better Rates

The better your credit score, the better your interest rate will be when borrowing. Because tenant loans are unsecured, the risk is higher for the lender. All interest rates are based on the risk to the lender.

To get your most competitive tenant loan rates, know your credit score, take care to keep your credit score strong and, if it's low, improve it.

Improving your credit score takes time but is easily accomplished. Pay loans and bills on time. Clean up any past due accounts.

Hidden Credit Strengths

Even if you have no credit track record, you can still get good tenant loan rates. If you are a renter and you pay your rent on time, you have established a history of sound financial practices. While not technically a loan, when renting you are "borrowing" a place to live for which you pay monthly.

Tenant loans were designed for those with no collateral and for those who live in a rental. Your good rent-paying history is a hidden strength when applying for a tenant loan.

Bad Credit Isn't the End

With a bad credit score or poor credit history, you will pay higher interest rates than those with good credit. But it doesn't mean you can't get a tenant loan. In fact, there are tenant loan providers who specialize in bad credit tenant loans.

Your goal becomes to get the best rate you can with bad credit. Be certain to clean up all contributing factors to your poor credit before applying. This includes getting current on past-due bills or debts. Don't forget, if you closed a credit card account with a balance, the money you owe hasn't gone away. Clean up old credit balances, even on closed credit card accounts. Consolidate your debt, too. The fewer sources of debt you have the better risk you appear to be to lenders.

Know and Shop

Tenant loans are short-term, higher-interest loans. When you apply, demonstrate on your application that you understand what tenant loans are for and how they work. Don't apply for a loan for a large amount of money. Don't seek a loan with a long payout. Again, lending is based on risk. Lender confidence that you understand what you're getting into reduces their appraisal of your risk.

Finally, shop. Tenant loans are offered through a host of online sources. Whatever your credit standing, compare offers from available lenders to get the best personal loan rates you can.


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