For landlords who are borrowing money but have a demonstrated history of affordability and who have been renting a property for the past five years, lenders will use the same criteria as when borrowing for long-term business loans even if it is for refurbishment purposes.
This type of loan has a somewhat unusual repayment schedule in that you also have to pay back a portion of each pay period. This often runs from 25% to 50%, depending on how much you have borrowed and how much you make each month.
These loans operate differently from most others, and some lenders have recently been experimenting with to see which loan type offers the best repayment rate.
For a lender, the biggest worry is that a loan defaults and the money is never repaid. Some lenders define themselves by the profit margin, which is expressed as interest, but the loan still needs to be paid back. So if landlords borrow money to furnish a property to let and buy items such as a glass table for the purpose to make money they will be more likely to be accepted for a loan.
The most challenging aspect of any loan, including payday loans, is debt payback. Because of this, lenders are attempting to extend the overall payback period that have been provided to their clients.
It is simpler to handle both the customer’s repayments of the loan as a whole if lenders make it as simple and straightforward as feasible for them to repay the loan they have taken out. In order to boost the repayment rate, the focus should be on the customer’s ability to return the loan easily rather than on the lender doing everything they can to have it paid back soon.
In this way, if a customer has demonstrated that they will remain in their position for the duration of their payback terms and has a demonstrated track record of affordability with prior loans or bills, it becomes a factor in the repayment plan.