This is blog post about loans by Alex.
Before you can rent a property in the private real estate market, you will be required to pay a form of security to the landlord or agent. This security is known as a rental bond and is held by the Residential Tenancies Fund, Renting Branch of the Office of Fair Trading, or the Office of Rental Bonds for the duration of the rental agreement.
Landlords can collect anywhere from four to six weeks’ worth of rent in – but you can negotiate this with your landlord. It is a one-off payment that cannot be added to once it has been made. Always make sure to check in with the local rental bond authority before agreeing and transferring a rental bond.
It’s worth pointing out that rental bonds are not mandatory and optional. However, every residential tenancy lease agreement requires bond payment. This makes the cost of moving to a new house more expensive because tenants have to arrange for moving costs on top of additional bond payments.
Leases of up to three months don’t require a lodge, especially if the occupant comes from abroad due to all the paperwork involved in receiving and refunding the amount.
Once the rental agreement has expired, the landlord will be required to refund the rental bond back to the tenant, provided they don’t have any claims.
However, it isn’t uncommon for some landlords to delay this process due to unfounded claims from agents. This means that tenants have to pay their new bond before they can get their old bond back. It can get financially difficult for some tenants to secure a new place when they are short on cash. This is especially true if the bond on the new place is too high.
Outside of claims made by the landlord or agent, the refund of bond money can be delayed due to various reasons such as paperwork and processing delays. Errors on the form containing bank details can also cause delays for several days.
And that is where bond loans come in. Many loan providers provide bond loans on low credit ratings. Online applications are quick and near instantaneous.
About Bond Loans
Bond loans are a form of unsecured personal loan. The money is lent to the tenant to use for the bond and lodging with the local rental bond authority. Depending on the amount required, the bond loan can also help with miscellaneous expenses such as moving costs.
Regardless of the amount lent to tenants, bond loans are generally classified into two types. Some have an interest fee, and some don’t. The loans without interest rely on associated fees to generate a profit. They often cost the same as bond loans with an interest fee.
What To Do If the Bond is Subject to a Claim?
The best way to avoid a bond dispute is to maintain good communication with the landlord or agent. You should also do your best to maintain documentation of the property. Take pictures and videos of the property before moving in.
During your stay at the property, make sure to report any maintenance or repairs required. Keep track of any damage that you have caused. It’s better to fix the damages you have caused during your stay than to deal with them after you’ve left the property.
If there is a bond claim, try not to get upset and maintain your professional decorum. Most bond claims are for property damage, rental arrears, and utility bills. Try to resolve the situation by communicating with the landlord in person or by phone to settle the bond claim.
The best way to resolve the situation is by negotiating with the landlord. If you are unable to resolve the claim, you can get the tribunal involved. The tribunal will study the facts of both sides and may order a partial or full refund of the rental bond.
With that said, most tenants choose to settle arrears claims with the landlord to preserve the status of their no-claim record.
Pursuing the bond claim through a tribunal can cost time and money, and it’s usually not worth the amount you’re trying to secure. In any case, it is recommended to resolve the matter with the landlord or agent.
Why It’s Convenient to Apply for a Bond Loan
Due to the hassles associated with bond refunds and the costs of moving to a new place, many occupants find bond loans to be a better use of their time and money. Thousands of Australian tenants use rental bonds to help them manage the monetary impact of moving.
Think about all the expenses involved – there’s the cost of moving furniture and appliances, hiring a truck, and others. This is a lot of cash to arrange on short notice.
Most lenders provide flexible bond loans that are more flexible than personal loans, with amounts ranging from $400 to more than $4,000 and above. Tenants don’t have to deal with a lot of paperwork when trying to secure a bond loan. The approval process is very quick, and individuals with bad credit ratings can also get approved.
Most lenders will only ask for a few documents, which are easy to arrange. They include proof of government ID card, driving license, or passport). Tenants may be asked to provide three months’ worth of bank statements and may also have to provide a Medicare card. These items are almost always easy to arrange.
In short, applying for a bond loan provides you with quick and easy access to capital that can help you fund your moving expenses. Lenders know there is no time to waste when it comes to moving. If you want to get cash instantly, the lender will offer quick and easy applications that are ideal for your situation.
It isn’t uncommon for applicants to get approved and funded the same day. With that in mind, it is recommended to start the application for bond loans as soon as you have decided to move. This will save you time, money, and headaches.
Greg is a Chartered Financial Analyst (CFA) with 22+ years experience in Financial Services. He has held numerous FINRA Securities licenses (series 7, 63, 65, and 66), and is an expert on Investment Products and Financial Planning. Greg has 22+ years experience as a real estate investor and degrees in Psychology and Philosophy.
Greg has been quoted/interviewed in Yahoo Money, Yahoo Finance, USA Today, Authority Magazine, Realtor.com, Business Insider, and others.
Greg is an avid runner, and the father to identical twin girls and their awesome brother. His love of budgeting and his kids led him to join The Great Resignation in 2021.
Disclaimer: Any Financial Tips on ChaChingQueen are general and informational. Speak with a professional about your specific situation.