Tenant loans are basically a source of credit for those people who do not have a house, or any other assets, to put up as collateral against their borrowings. While not as widely used as credit cards they do have a number of benefits that may make them preferable to the borrower.
Another feature to tenant loans is that they are one shot deals. If you are prone to getting over your head in debt, a credit card is definitely the wrong choice for you. With the revolving line of credit, it is all too easy to just add a purchase here and there, soon reaching your card’s limit.
The reason for this is probably down to impulse buying, as putting the cost on a card for the odd purchase is so easy, and easier still to forget about until later, when the statement arrives. By contrast tenant loan applications will normally have been thought out long in advance, and will generally be for something important rather than something trivial.
They are also very quick and straightforward to sort out, making them a good option in case of an emergency. You can complete a simple online application without the need for supporting documentation, and can reasonably expect to see the money in your bank account by the following day.
These loans are also perfect for someone with a bad credit history as, while they may be rejected by credit card companies and banks, there is a fair chance they might be accepted for a tenant loan. This can be a useful way to start to rebuild and repair a borrower’s credit score too.
The only disadvantage of this type of loan is that the interest rates are often higher than those on a secured loan. The lender has to compensate for the risk they take when lending to people with a poor credit history.
If you are the kind of person who struggles to manage credit card debt effectively then tenant loans may benefit by being a much simpler arrangement.
If you have already run into problems with debt, and damaged your credit rating, then this kind of loan may be a good way to help you repair it.
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