How to Find Reliable Tenant Loans for Bad Credit in the UK?

by Jemma Madison Financial Writer

Are you an unemployed graduate looking for a loan or someone who works but do not own a home? In either case, you may avail a short-term loan as a tenant. However, not too many lenders are willing to extend tenant loans for bad credit scores. Please note that a credit score is not the only deciding factor for a loan. A lender may provide a Tenant Loan despite a bad credit score.

Here is a step-by-step guide to tenant loans:

1. Find out how much you want to borrow
Before you begin your search for tenant loan, it is important to know how much you want to raise as a loan. Being a tenant with poor credit rating, your credit worth is low and thus it is important that you do not look forward toa very fat loan. It is always suggested to borrow moderately, well in your means. Borrow what you need and repay within the agreed bracket of time to avoid damaging your credit score.

2. Search online for brokers or lenders
While you search for online brokers, make sure you choose an FCA authorized loan broker or lender. With a licensed broking service by your side, you are likely to find a reliable deal. Choose the right lender or broker for your loan.

In order to contact a broker, fill a form on their website. Try to explore the online market and find a broker who doesn’t charge any upfront fees to their borrowers. As this will also help you save some amount of money.

3. Put across your credit requirements clearly
Brokers are experts in searching for customized loans and you should thus put across your loan requirements clearly. Being a tenant, you may require an unsecured loan without a guarantor or collateral. Always borrow as per your repayment capacity. For accumulating too many loans would only take you closer to a debt trap.

4. Have a repayment plan
Plan out your repayment structure. This will enable you to repay the monthly instalments towards your tenant loan with ease and comfort. Make sure you pay back regularly, as this will gradually help in the improvement of your credit score.

Things to keep in mind:

•    Always borrow according to your needs.
•    Consider your repayment affordability before choosing the loan amount.
•    Ensure to deal with FCA registered lenders or brokers.
•    Draft a repayment plan and monthly budget.

Tenants in the UK can easily avail a loan to fix or improve their home, to treat an urgency or to fulfil any other needs. They can use it for any purpose, as there is no restriction in its usage. For availing a loan, the basic requirements are:

•    Applicant must be a citizen of the United Kingdom
•    He/She must be 18 years of age or above
•    Must have a valid and functional bank account

Individuals seeking for tenant loans can avail online. A credit check is mandatory. However, there are a few loan brokers in the UK, which initiates a soft credit check to assess loan eligibility. A soft credit check doesn’t impact your credit score and doesn’t leave any footprints on your report. Hence, your credit score is not impacted in the process.

Borrow responsibly and pay back proactively to avoid getting into a debt spiral.