TenantsTips / Australia / Finding and Applying for Bond Loans for Tenants

Finding and Applying for Bond Loans for Tenants

Finding loans for tenants in Australia is not all that difficult. It is applying for them and getting approved that takes a little more work and can be time consuming.

In order to rent a property you normally need to pay 4 weeks rent as a bond, which is held by the rental Bond Authority and 2 weeks rent in advance.

The reason most people apply for a bond loan is because the bond is not normally released until you vacate the premises and the landlord has approved its release. But you need to pay a bond on your new premises and considering that these amounts can be quite considerable it can sometimes become necessary to borrow the amount for a short term. In these cases borrowing for a bond is not all that difficult.

If you do not already have a bond on your old property borrowing can be a little harder.

Unless you have a good credit rating and already established relationship with your bank it is very hard to get a loan for a bond for a rental property. Using a credit card or bank overdraft to pay for your bond and rent in advance is not the ideal way but in some cases necessary. When a person needs to move house but does not have a bond, borrowing a bond may be the only option.

Proving your credit worthiness is important here and you must be able to show stability and the ability to pay back the bond within a stipulated time.

For those how are in steady employment and have some assets there are private lenders who specialize in Bond Loans. These bond loans are the amount of money needed as a bond for a rental property. The Bond is then lodged with the Rental Bond Authority and held for the term of your tenancy.

For people on government benefits with little or no savings obtaining a loan in the above manner will probably not be an option. The answer here would be to contact the nearest Dept of Housing.

Depending on what state you are in the Dept of Housing will help you in different ways, some with a bond loan that you have to pay back or in other states will give you all or part of the amount. They will assess the amount you can afford to repay against the amount you will need to acquire the rental property and if all is in order they will advance you the required amount.

Normally a cheque will be made out to the Real Estate Agent or the rental Bond Authority. In some cases they may even help you with the first two weeks rent in advance. It is wise to keep in mind that although it sounds very discriminating there are many real estate agents who will not accept bonds and rent paid by the Dept of Housing as they tend to think if you cannot pay these bills yourself how will you be able to be the rent.

Alternatively, if you are in severe financial hardship there are a number for charitable organizations that may be willing to help you in get into a rental property. This may be by advancing you part of the bond or by being able to offer cheaper accommodation until such time as you can save the total amount needed.

Finding and applying for loans for tenants will depend a lot on your circumstances, your ability to repay and the state or territory you are in with different laws governing each state and territory. In most cases it is a matter of finding the right lender for your situation.



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