By David Pilley on November 7, 2011
.jpg.aspx?width=75&height=75) Poor credit loans for homeowners. Poor credit loans for students. Poor credit loans for tenants. Wait, what was the last one? It seems like creditors will offer loans to any Joe Schmo these days. Keep in mind that subprime mortgage loans were a big factor in the 2008 economic crash. Potential homeowners lied about their incomes, and many lenders never checked to validate the information. When interest rates went up and the homeowners couldn’t afford the mortgage anymore, they had to foreclose. I wrote all of that in the past tense, but it is still happening in the present. We’re just now aware of the causes of so many foreclosures.
You should be alarmed that lenders are offering poor credit loans for tenants. What is a tenant? Well, the full economic definition is an owner of a leasehold estate. Sounds regal, but the laymen’s term is the owner of a temporary right to land, or a lease. Leasing and renting are synonymous, so being a tenant is like being one step below a homeowner with a mortgage. Leasing rarely involves a time span of more than ten years, while an average mortgage is either a 15 or 30-year loan. A lease will also typically involve a monthly payment that is half of a monthly mortgage payment.
So, being a tenant means dealing with a lot less money than being a homeowner with a mortgage. And if you haven’t ever dealt with paying thousands of dollars a month, you might just get in more trouble by trying to get a loan. Loans for tenants seems to be primarily a British thing. From the websites I looked at, they were all offering amounts of money in terms of pounds (the symbol £ that looks like a hybrid of F and L), so I couldn’t find any dealing with the familiar $ symbol. However, some of the websites offered loans to residents of either the UK or the US.
Some of these websites are offering loans of up to £ 25,000 (close to $40,000), and many of these websites also offer loans to tenants with “bad” credit. Just like any loan, it can help improve your credit score if you deal with it properly. Make payments on time, and you may eventually have a score back into the 600s. Miss even one payment, and your credit will not improve! I’m definitely not going to give you any links to lenders offering loans to tenants because there are some bad lenders out there. If you are a tenant and you think you need a loan, I would suggest you go small. Never get any amount you can’t handle, and always remember that you’ll be paying back more than you receive because of the interest rate.
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