A new product will give tenants the option to pay rental bonds in instalments and protect their money from being mishandled.
BondSure will enable tenants to apply online to have rental bonds up to $5,000 paid on their behalf by the company, to be repaid over six to 12 months.
The service will maximise the chances of renters’ bonds being returned, the company said, adding that it is also offering Australia’s first optional bond insurance.
The insurance will provide cover up to the bond amount for the most common areas of dispute – accidental damage and additional cleaning charges.
“Paying a bond can be an untimely nuisance for tenants, tying up money at the start of the rental period when many people would prefer to spend money on other things,” BondSure chairman Michael Wood said.
“Recouping bonds can also be a real nightmare for some tenants when accidents or disputes over cleaning put the bond in jeopardy.”
The product is flexible and tenants can take out insurances without getting their bond through BondSure or they can have their bond paid without also securing insurance.
Mr Wood said the service is a “compelling alternative” to payday lenders, whom he claims are “exploiting the residential bond market” by offering loans to consumers with comparison rates of over 150 per cent and repayment terms as short as four weeks.
On an average $1,000 loan over 12 months, BondSure will charge an annual percentage rate of 16 per cent, with additional fees and charges. Bond insurance costs $18 per month.
The insurance component of the product should lead to less bond disputes between tenants, property managers and landlords, BondSure CEO Paul Mylott said.
“BondSure utilises leading identity and credit check providers and an online credit worthiness assessment to qualify BondSure-approved tenants, which is an aspect of the product we expect to be warmly received by landlords,” Mr Mylott said.
Property managers only need to register once, provide bank details for the bond transfer, and check the rental address on the BondSure website when the lease is signed.
“We hope BondSure will be perceived as a win-win for landlords, real estate offices and tenants alike,” Mr Mylott said.