Personal Loans to Pay Rent
Personal loans can be used to pay rent, but there may be better options.
For many of us, rent is our largest monthly expense. When income is lacking, say from unemployment or underemployment, rent can be the most difficult to pay. A personal loan can be a short-term fix, but these loans can be expensive, and there may be better options to consider.
Should a personal loan be used to pay rent?
- Using a personal loan to pay rent should be a last option
- A loan adds debt and may have a high-interest rate
- If you miss payments, your credit score may drop
- Only take a personal loan if you’re sure you can repay it in the short term
- Look into other options before turning to a personal loan for rent, such as speaking to your landlord or getting a roommate
A personal loan for rent can be a costly option
Taking a personal loan for rent can address a financial deficiency, however, it requires gauging the dangers and advantages.
This is what to consider prior to taking a personal loan to pay your rent:
1. A personal loan means added debt. Every month you’ll owe both your rent and your loan installment payment.
2. Personal loans come with interest. Most short-term loans have higher interest rates. Longer-term loans mean you’ll be paying interest fees for longer.
3. Your credit score will decrease if you don’t make the payments on time. Missing even one payment can decrease your credit score.
When is a personal loan to pay rent a good idea?
If you’re in need of short-term financial help and you’re sure you’ll be able to pay it off, a personal loan to pay rent may make sense for you.
For instance, perhaps you’re taking a new position, and you’ll have a gap between checks. Or then again, you may be moving among condos and need assistance paying your new home’s security deposit while you trust that your previous landowner will return your past security deposit. In both of these cases, you realize you’ll have the option to reimburse the loan.
Alternative options for rent help
Besides personal loans, there might be alternate approaches to getting financial help with your rent.
- Converse with your landlord. In the event that you have a background marked by making on-time lease installments, your property manager might offer some help. This could come as postponed late charges, a payment plan, or conceding payment for a month.
- Supplement your pay. Think about approaches to bring in additional cash to cover your financial need. You might consider a side gig or selling belongings.
- Request help from family or friends. Help from friends or a family member might have preferable terms over different banks, yet your friends and family will not realize except if you inquire. You may likewise investigate crowdfunding websites like GoFundMe.
- Change your living situation. Talk to your landlord about renting your place or rooms inside. Moving in with a friend or relative for a brief timeframe while you rent your place could cover your financial gap.
- Call 211. 211 can associate you with neighborhood social administrations, including not-for-profits and organizations that might assist with rental help.