Is rent coming due for your apartment or rental house and you don’t have the money for rent? Or perhaps you are short on the security deposit required to move to a new rental? There is the option of getting a loan to pay for all or some of the rent or security deposit so you can avoid the possibility of eviction or not having housing.
Before getting a loan to pay for your rental. Assess your current reason for it. A job loss has reduced your income? A medical emergency or car breakdown wiped your savings? Do you have bad credit and the landlord is requesting higher deposit? You will still be able to obtain a loan for your rent if you have bad credit, low savings or low income.
Have a good idea of how much exactly you need and how soon you can pay it back. If you are able to pay for most of the rent and just get a loan for just some of the amount, that will save you on the interest of the loan.
Explore the traditional routes of credit. Typical banks and credit unions take a while to approve a personal loan, which does not work in your favor if you have to pay rent within the next few days. They also usually require good to excellent credit and income.
If your landlord takes credit card, figure out the rates of your credit card and compare them to the smaller lenders who specialize in short term loan to pay you rent.
Do you have a collateral as a security for the loan, such as a car? Auto title loans will provide a short term loan on your car within the same to next day of applying. But you are putting your vehicle at risk and could jeopardize your situation worse if you default on the auto title loan. These are best for you if you have no current income and bad credit.
There are variety of lenders who will assist you in helping you pay your rent with an unsecured loan – with out a collateral.
If you have employment, cash advances will loan you based on your paycheck and will approve you within a day, helping you pay your upcoming rent. The loan gets paid back directly to them on your next pay check. Cash advance could be advantageous if you are in need of emergency cash with very low approval requirements.
Another type of lender is an installment lender, which does not base your loan on your paycheck. Installment loans allows a longer period for you to have the loan with lower interest rates. Approval standards are higher than auto title loan and cash advance loans, but getting this type of loan will be your best value for several reasons:
- Since the payments are in installments and the whole loan does not come due within the first month, you can budget your rental payment along with loan payments.
- If you are using the installment loan to pay for security deposit, additional funds from the loan can be paid back quickly, eliminating some of the debt and avoiding more interest expense.
No matter what loan you get to pay for your rent, the cost of the loan will tell you if it is worth it or not. Discussing with various types of lenders the rates, budgeting the costs and comparing it to your income and savings is the best way to make an informed decision if you should use a loan to pay for rental housing.
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