UK Loans - Qualifications for a Bad Credit Tenant Loan

Factors for getting a bad credit tenant loan

When you’re looking for a bad credit tenant loan, you have to keep in mind that each lender is going to have different qualifications. Your credit score and financial stability are going to have a great deal to do with what the lender will be willing to provide in both loan amount and term of the loan.

Employment Stability

Lenders always look for stable employment no matter what kind of credit standing you may have. However, when you are seeking a bad credit tenant loan, lenders are going to be pickier than they would be if you had good credit. For instance, someone with good credit may be able to quality for a loan even if they have only been working for the same employer for a few months, but for someone with bad credit the lender may not approve your application at all because of your current employment situation. That doesn’t mean you won’t qualify for the loan at all, but you must present something that justifies the recent change in employers.

Financial Stability

Even though you may not have good credit, you can still have financial stability in the form of a savings account, securities, motor vehicles and even a flexible retirement account. All of these assets can be used to secure a bad credit tenant loan, and you have to be prepared to use them as collateral. The bank is usually interested in more liquid assets such as savings accounts or titles to motor vehicles instead of stocks and bonds that have volatile values. You will not find a lender that is willing to approve an unsecured loan for someone with bad credit. In fact, with the current state of the economy it is unlikely you will find a lender to approve an unsecured loan for any borrower with less than excellent credit and a high credit score.

Value of Collateral

Another factor that is going to affect your application for a bad credit tenant loan is the value of the security you are offering. Though lenders prefer real estate, the fact that you are looking for a tenant loan tells the lender you do not own real estate. You will have to negotiate with the lender in order to come up with an equitable solution to the problem of collateral to secure the loan. Next to real estate, lenders prefer titles to motor vehicles that are free of liens.

Whether your motor vehicle is acceptable to the lender will depend upon the age and condition of the vehicle as well as its value. If you have a newer vehicle that you have kept in good condition, you will have a better chance of the lender accept it as collateral than if you have an old clunker that barely gets you back and forth to work and the store. You want to weigh all your options before you begin searching for lenders so that you know any steps you may have to take to secure your loan.