Obtaining A Loan If You're A Renter

By Author: Martin Sumner
Total Articles: 434
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People who own their home have always held an advantage when it comes to being approved for a loan. By offering their home up as collateral, they much reduce the chance that the lender will lose out if the repayments aren't kept up with - the home can be seized and put up for sale to clear the debt. This clearly doesn't apply to those who rent their home, so what do finance companies take into consideration when deciding whether or not to okay an unsecured credit application from a tenant?

First, fundamental financial information such as income and rent levels are surveyed to find out if the borrowing will be feasible. If it seems like the borrower's budget will be overextended by taking on a new loan, it's unlikely to be okayed.

Secondly, the credit score of the individual is studied to ascertain if they have a past record of defaults and the like. The more negative information there is on the credit file, the more difficult it is to get the application granted. Conversely, if the applicant has a clean credit history with a lot of sound financial activity, then the chances will be increased.

If you own ...
... your home, some bad credit info will likely be disregarded. What if you're a renter with a tarnished credit history and can't gat an approval? The only alternative might be to find someone happy to secure your loan. This may be a parent or other member of your family who is disposed to utilize their own assets and good credit history to support your loan application, agreeing to adopt the responsibilty of paying the installments if you should fall behind.

About the author: Martin writes for http://www.unsecured-loans-for-tenants.co.uk/ where renters of all financial backgrounds can apply for an unsecured loan.