Buzz
In response to the ever-rising rent prices, the Wall Street Journal reports that loan companies are now promoting loans designed to help renters who are struggling to make ends meet.
Some of these lenders target those in upscale apartments, while others focus on individuals living in more affordable homes with tighter budgets.
A program featured by the Wall Street Journal comes from property management firm Stay Tony, offering tenants in Los Angeles and Atlanta the option to finance up to three months of rent over a year. Partnered with Uplift, the loan comes with zero interest for the first six months, and a 15%-17% interest rate thereafter.
Other services you may have come across include Domuso and Till, which collaborate with property managers to ease rent payments, even offering loans to cover all or part of the rent. Till claims on its website that its loans, which can go up to $2,000, are four times less expensive than payday loans or late fees.
The WSJ points out that the rising cost of rent is a major factor, with the median rent in the U.S. hitting a record high of $1,006 per month earlier this year. It also references a National Multifamily Housing Council report, which finds that 3% of renters (from over 100,000 surveyed) pay their rent using credit cards. If more landlords allowed credit card payments, 16% of respondents said they would use this method.
Rent-specific loans might seem a bit off-putting, but they're certainly not as predatory as payday loans, which come with exorbitant interest rates. However, unlike payday loans, you’ll need to ensure your credit score is in good standing before applying for a rent loan.
If you’re stressed about your ability to pay rent, make sure to thoroughly read the fine print of any loan offered through your landlord. The last thing you want is to have the same person or company controlling both your rent and the interest on the loan you took out to cover it.
If you’re in the process of choosing a rental and are feeling concerned about managing your rent payments once you move in, it may be time to reassess your housing costs. It’s not always fun (and may not be possible in every area), but reducing the portion of your income spent on rent can help create a financial buffer that eliminates the stress of scrambling to cover rent.
