Rental bond loans
What are rental bond loans?
Moving house is an expensive and stressful business at the best of times, but when you're moving into a rental property there are expenses on top of the basic removal fees. When you have to find a bond or a deposit on the rental property it can be difficult to pay it all upfront, especially if you're not only paying a bond but a month's rent in advance.
Rental bond loans have been designed to help with these costs when you move into private rental accommodation and can make a significant difference to your initial outgoings.
Why do people use rental bond loans?
When you're moving into any property, whether you are going to rent or own it, there are a lot of expenses to take care of. If you're getting a mortgage for a home you'll be aware of the need for a deposit and that there will be legal and other fees to take into account. When you are going to rent a property not only do you have to plan for how much the actual costs of moving your belongings will be but consider the fact that you will also have to pay a returnable bond and, likely as not, a month's rent in advance. This is where rental bond loans can help, and as the rental market can move very quickly it's easy to lose your dream property if you haven't got the funds quickly available. Loans may also help towards your removal costs, further lightening the initial financial load.
What are the main features of rental bond loans?
Whoever lends you money for a rental bond loan will need to get a range of information from you to ensure you are eligible. Bear in mind that states and territories in Australia have schemes for these types of loan as well as private providers.
The basic criteria for eligibility are that you are an Australian citizen, that you are over 18 and that you are in employment. Depending on the amount of a loan, lenders will agree a timescale for repayment. It can often be very short-term, if that suits your financial circumstances, but you should bear in mind that interest rates will be quite high so you should make plenty of comparisons before making a decision. You should also check whether interest rates are fixed or variable as that could impact the level of your repayments.
What are the pros and cons of rental bond loans?
If you're having difficulty obtaining the funds up front for moving home then a rental bond loan may be the ideal solution for you. They are generally agreed very quickly, provided you pass the various eligibility tests, and money can be in your account in time for you to pay what is necessary.
Lenders may check payroll details with your employer so you need to be accurate with the information you give. Interest rates are likely to be high but if it's a short-term loan and you have budgeted properly for it you may be able to factor it into your monthly outgoings.