Borrowing money is nowadays a very normal thing to do if you want to buy some luxurious items which you could otherwise not afford. However, sometimes it seems that it is just too easy to apply for an online loan with all those ‘within 3 minutes’ application forms that many websites have. A loan is not something you should take lightly because it will take a very long time before you have repaid it completely.
There is a special type of loan for every circumstance but basically the main difference is if a loan is secured or unsecured. A secured loan means that you have to show collateral to decrease the risks a loan company is taking by obtaining you a loan. The reward you get is that you can borrow a higher amount of money and the interest you have to pay will be much lower compared to other loans. You can only show collateral if you are a home owner or if you own any other type of real estate. Obviously not everyone owns a home so not everyone can obtain a secured (personal) loan.
That is why loan companies came up with another type of loan structure plan where so called tenants, persons who are not a homeowner but do have an address, could borrow money without showing collateral. The main difference between secured and unsecured loans is the difference in interest rates and amount of money you can borrow. Unsecured tenant loans are more expensive interest wise because banks take more risks by obtaining you a loan and they compensate that risk by increasing your interest rate.
The amount of money you can borrow will depend on your personal financial situation. Loan companies will check your credit worthiness by looking at your FICO score, this is a numeric value that tells how good or bad your personal finance is.
It is important that you have enough tenant loans info before you apply for a loan because this knowledge will save you money. If you don’t know how it all works out than it is better to ask a family member to help you instead.