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Should I get a loan for rent?

A loan for rent can help when you’re struggling to make ends meet, but it’s not always the best choice.

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By Emily Batdorf

Written by

Emily Batdorf

Freelance writer

Emily Batdorf is a personal finance expert specializing in banking, lending, credit cards, and budgeting. Her work has been featured by the New York Post and MSN.

Edited by Meredith Mangan

Written by

Meredith Mangan

Senior editor

Meredith Mangan is a senior editor at Credible. She has more than 18 years of experience in finance and is an expert on personal loans.

Updated March 21, 2025

Editorial disclosure: Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”

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Struggling to pay rent can be stressful and overwhelming, but there are resources out there that can help. Depending on your situation, a loan for rent may be a good, though temporary, solution. 

Using a personal loan for rent can get you money fast, and can be a good financing option, especially if you’re in a short-term bind.

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What to consider before taking out a loan for rent

Before you take out a loan to pay for rent, consider your financial situation. Not only does your current situation affect your ability to qualify for a loan and pay it off, but a loan can impact your finances and credit moving forward.

Keep the following in mind:

  • You’ll have to pay interest on the loan: When you take out a loan, you agree to pay it back in full, plus interest. Take time to think about whether or not you can afford to take on more debt or if it might put you into an even tougher situation.
  • You may need good credit to qualify for a loan: If your credit isn’t in great shape, qualifying for a loan can be tough. Personal loans for bad credit do exist, but they generally come with higher annual percentage rates (APRs), which account for the interest rate and any fees. If you can’t get a loan with a decent rate, it may be worth considering other options first.
  • Missing a loan payment can hurt your credit: Of all the factors that affect your credit score, your payment history has the largest impact. Falling behind on loan payments can be detrimental to your credit, so make sure you’ll be able to keep up with monthly payments before taking out a loan.

When to take out a loan for rent

Ideally, your monthly budget covers your rent, and in case of emergency, you have savings set aside. But life happens, and sometimes that’s not the case. For instance, taking out a loan to pay for rent might be the right move if:

  • You’re in between jobs: Maybe you have a new job lined up, but you won’t get your first paycheck for another month. If you’re short on rent but know you’ll soon have the income to cover it, taking out a loan for rent can be a good solution.
  • You recently moved: Moving costs can be high, and with your first month’s rent and a security deposit due upon move-in, finances may be tight. A loan can help if you need a little extra cash while waiting to receive your security deposit from your previous landlord. 
  • You have plans to save on rent: Maybe you’ve decided it’s time to move to a less expensive place or invite a roommate to live with you. If that’s the case, a loan can help you in the short term. Just make sure the money you’ll save in your new situation will be enough to cover the loan.

When not to take out a loan for rent

Based on the considerations above, there are times when it’s not a good idea to take out a loan to pay for rent. 

For instance, if you have bad credit, a rent loan may not be the best idea. APRs average over 30% on bad credit loans, which can make them harder to pay off. With a high rate, you’ll either have hefty monthly payments or a long repayment period — both will impact your budget.

Similarly, it’s probably not wise to take out a loan for rent if you don’t have a plan to pay it off. Doing so may lead to falling behind on payments — which can negatively impact your credit score and make borrowing more difficult and expensive in the future.

Related: How Does a Personal Loan Affect Your Credit Score?

Types of loans to consider

There are several types of loans to consider if you’re looking for a way to pay your rent. Secured loans, unsecured loans, and emergency loans are all worth consideration.

  • Secured loans: These loans require collateral — some kind of valuable asset, like a car or a savings account — from the borrower. Because of the collateral, borrowers can typically qualify for a secured loan more easily and more affordably compared to an unsecured loan.
  • Unsecured loans: Unlike secured loans, unsecured loans don’t require collateral. This makes them riskier for the lender, which may charge a higher interest rate to compensate. You may also have a harder time qualifying for an unsecured loan, especially if your credit isn’t in great shape. 
  • Emergency loans: This type of loan refers to short-term loans that provide fast funding in the case of an emergency. They can be secured or unsecured and include products such as personal loans, credit card cash advances, and payday loans.
  • Payday alternative loans: Offered by some federal credit unions (CUs), payday alternative loans (PALs) are a great option if you don't have good credit. You could borrow up to $2,000 and have up to 1 year to pay it back, depending on the type of PAL. Rates are capped at 28%, and many CUs don't run a credit check. But you'll need to be or become a member of the credit union to get one. 

Tip: When considering a loan for rent, avoid taking out a payday loan. Fees are high relative to the amount you can borrow and repayment is often due in two weeks. This makes APRs astronomical over 400% in a number of states.

Compare: Secured vs. Unsecured Personal Loans

Pros and cons

Before taking out a loan to pay for rent, weigh the pros and cons.

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Pros

  • Avoid missing a payment
  • Quick funding
  • Less expensive than a credit card or payday loan
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Cons

  • Increases debt
  • Short-term fix
  • May have fees

Pros

  • Avoid missing a rent payment: Taking out a loan to pay rent can help you avoid the negative consequences of missing a rent payment, such as damage to your credit score over time and possible eviction if you miss more payments.
  • Quick funding: Some lenders can approve your application and disburse your funds within a day or two. Some could take longer, depending on the lender. 
  • Costs less than other alternatives: A rent loan may cost less than some alternatives, such as a payday loan or a credit card.

Cons

  • May increase your debt: Taking out a loan increases your debt burden, possibly leaving you in a worse position than before.
  • Only a short-term fix: Paying rent with a loan is only a short-term solution. If the issue persists, you may want to consider other alternatives, such as talking to your landlord, or asking a relative for help.
  • Includes fees: Loans have a variety of fees that can add to the cost of borrowing, such as origination fees.

How to apply for a personal loan for rent

  1. Prequalify: The first step is to prequalify with several lenders to get a sense of whether you're likely to be approved, for how much, and at what rate. Prequalification won't hurt your credit, but it's not an offer of credit either — your rate could differ when you formally apply for a loan.
  2. Compare loans: Review the loan quotes you received by prequalifying and compare APRs, repayment terms, upfront fees, loan amounts, and funding times. Also check customer reviews on sites like Trustpilot and the Better Business Bureau. 
  3. Apply: After choosing a loan quote that has terms and an APR you’re happy with, apply for the loan. At this stage, most lenders will run a hard credit check, which could ding your score for up to 1 year. You may also have to provide documentation of your income address, and employment. Lenders consider your credit history, debt-to-income ratio (DTI), and overall financial situation before approving you. 
  4. Review the loan agreement: If the lender give you the green light, review the offer carefully before accepting. Are the rate, monthly payment, loan amount, repayment schedule, upfront fees, and monthly due date acceptable? If so, sign the agreement and other documents necessary for the lender to transfer funds.
  5. Receive funding: Once the agreement is signed and submitted, await funding. This could take a few hours or a few business days, depending on the lender.

Learn More: How To Apply for a Personal Loan

Alternatives

If a rent loan won’t work for you, there are plenty of alternatives that may better suit your situation. Keep the following options in mind when looking for help with rent:

  • Ask your landlord for flexibility: If you’re between jobs or waiting on a security deposit from a previous rental, your landlord may be understanding. Try explaining your situation, and ask if they’re willing to be flexible for a month or two.
  • Reduce your rent payment: If your rent payment is just too high, consider finding a way to reduce it. You could live with a roommate and split the cost of your current rental, or you could move to a less expensive unit.
  • Increase your income: If you’re not interested in reducing your rent, think of ways to boost your income. For example, you may be able to negotiate a raise at work or take on a side hustle to give your budget more wiggle room.
  • Ask for help: If you’re struggling to find a solution, consider asking friends or family for financial help in the short term. Offer to put the agreement in writing. You can also call 211 or visit 211.org to find resources in your area.

FAQ

Are there any government programs that offer loans for rent?

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What happens if I default on a loan for rent?

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Are there any tax implications associated with a loan for rent?

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Meet the expert:
Emily Batdorf

Emily Batdorf is a personal finance expert specializing in banking, lending, credit cards, and budgeting. Her work has been featured by the New York Post and MSN.