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Article added: 02/02/08

Unsecured loans for tenants with bad credit

Tenants with tarnished credit histories generally have a more restricted choice of loans and usually have to pay higher interest charges than their spotless credit history homeowner counterparts.

Unlike people who have a mortgage, tenants and people who live with their parents only have access to unsecured loans.

However the personal loans market is now shrinking as some lenders such as Liverpool Victoria have withdrawn products altogether, whilst others have tightened their lending criteria and have retreated from the non-standard bad credit market.

In the wake of uncertainty in the financial markets caused by the US sub prime mortgage crisis, rising levels of bad debt, a year of interest rate rises and turmoil caused by the Northern Rock breakdown, lenders have far less appetite for higher risk customers.

A tenant with a bad credit history looking for a loan might be spurned by a high street lender, but there are some specialist lenders still willing to help.

Nevertheless a tenant with a record of bad debts or with no credit history should think carefully before applying for a loan as they can expect to pay far higher rates.

Use the compare loans feature above to see what is available.

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