When moving to a new rental unit, property owners often require some form of security deposit at the onset of tenancy. This is referred to as rental bond. Hence, a rental bond loan is an interest free loan (up-to 4 weeks rent) given to eligible people who may not be in a position to raise the bond by themselves at the time. It helps them settle the deposit and then pay later in monthly instalments.
If you are thinking of utilizing a rental bond loan, here is a succinct guide of the application process to help you know what to expect:
How much bond do property owners take?
According to the law, most tenancies whose rent doesn’t go above the $700 per week mark ask for a bond that is equivalent to four weeks rent (maximum). If the rent is more than $700 per week, both the property owner and the tenant can negotiate the specific amount. The law doesn’t give a maximum on this one. Alternatively, if the tenancy is a moveable, the bond should be equal to two weeks rent and if the premise has an electric connection tied to the owner; three weeks rent.
The Application Process
The actual application process of rental bond loans begins with filling an application form. Thanks to the digital world we call home, you can do this step right at the comfort of your home. Some of the details you’ll need to surrender include the number of your family members, dependents, individuals signing the tenancy lease, any case of domestic violence, and your personal details.
Once you have filled the form, your lending institution will go over it and assess your eligibility. Many will want to know your credit score and proof of income. If your approval goes through, the lending institution will release the funds to your preferred bank account after which you can withdraw and pay your bond to your property owner or agent. Depending on the duration of your lease, your rent bond loan repayment period will be shorter or longer. For instance, if your lease is 12 months, you might have 12 months to repay the loan.
Retail bond loans can come in handy when you are in a rent crisis. It can help take care of the security deposit so that you can worry about other aspects of moving. Fortunately, the application process is quite seamless if you are eligible; so you have no excuse not to make that move once and for all. Hopefully, the above highlighted tips will point you in the right direction.