Shawn Bradley 
Paying your rent each month can be challenging even in the best of times. Losing a job, dealing with an unexpected bill or facing a medical emergency might make it even more difficult. During hard times, one option is to consider rent loans, which could provide additional financial support and help you stay in your home.
Before taking on this kind of loan, it’s important to understand what it really means and whether it’s the right move for your situation. Let’s walk through how rent loans work, what to consider before applying and other options you might want to explore first.
What is a rent loan?
A rent loan is a personal loan that you can use to pay your rent when money is tight. For example, if you’ve just started a new job but won’t get your first paycheck for a few weeks, a rent loan might help you stay on top of your bills until you are paid. But if you have no way to repay the loan, or if it will only create bigger financial problems, it might not be the right choice for you.
With a rent loan, you borrow money from a bank, credit union or online lender. You agree to pay back the loan over a specific amount of time with fixed monthly payments until the loan is paid off in full. Each monthly payment includes part of the principal (the original amount borrowed) and interest (the cost of borrowing).
As with any personal loan, you usually need to meet certain requirements when you apply for a rent loan, including having a steady source of income and a favorable credit score. The lender will decide how much you can borrow and what your interest rate will be based on your qualifications.
Calculate the total cost of the loan
The total cost of a loan includes the principal, interest and any fees the lender may charge, such as an origination fee (a one-time fee to process a loan application) or late payment fee, which can add to the total cost.
To calculate the total loan cost:
- Start with the amount you plan to borrow
- Add the total interest you’ll pay over time
- Include any extra fees
Online loan calculators can help you understand the big picture before you apply. Consider checking for prequalified offers, too. A prequalified offer could give you an idea of your chances for approval and how much money a lender may offer you. Unlike applying for multiple loans, checking for prequalification won’t impact your credit score.
Consider how fast you can pay back the loan
While a rent loan could give you quick cash to cover your housing costs, it also means you’ll have a new monthly payment to handle. If your income is limited or not steady, keeping up with your monthly loan payments could become stressful.
It’s important to look at your financial situation and decide if a loan makes sense. You may have income from a part-time job, unemployment benefits or other sources that make it possible to repay the loan within a few months. However, you may find it harder to manage if your financial situation is uncertain or you’re already behind on other bills.
Missing a payment could lead to extra fees, more interest and damage to your credit score, which can make it harder to secure financial support later on. But if money is coming soon, such as from a new job, a rent loan might be a helpful short-term solution.
Alternatives to rent loans
Before applying for a rent loan, it’s a good idea to see if you can find help in other ways. Here are some alternatives to consider:
Talk to your landlord
Sometimes, just having an honest conversation with your landlord can make a big difference. Explain your situation and ask if they’d be willing to offer a payment plan, a short delay or waive late fees.
Contact 211
Dialing 211 connects you with local community services. Operators can help you find food programs, housing assistance and emergency funds that may be available in your area.
Get a side gig
If you’re physically able, consider taking on a short-term job like food delivery, dog walking or other freelance work. Even earning a few hundred dollars a month could help cover part of your rent.
Seek state and local rent assistance
Many states and cities offer rental assistance programs for people in financial trouble. Try searching for these programs online or calling your city’s housing department for more information.
So, when is it a good idea to get a loan to pay your rent?
Rent loans can be helpful in emergencies, but it’s important to understand exactly what you’re signing up for.
A rent loan can help if you:
- Tried other alternatives without success
- Need help for a limited time, say one month or so
- Have a steady income, or a new job lined up
- Can afford the monthly loan payments
- Understand the total cost of the loan and your responsibilities
A rent loan is probably not a good idea if you:
- Are already behind on bills
- Don’t have a plan to repay the loan
- Need to keep borrowing money month after month just to stay afloat
A rent loan may offer you room to breathe
Remember — needing help doesn’t mean you’ve failed. It means you’re human. Carefully consider all your options. If a rent loan gives you breathing room and you’re confident you can handle it responsibly, it may be the right next step for you.
Notice: Information provided in this article is for information purposes only and does not necessarily reflect the views of disquantified.org or its employees. Please be sure to consult your financial advisor about your financial circumstances and options. This site may receive compensation from advertisers for links to third-party websites.
