Loans for Rent Payments

Are you short on rent this month? Is your next month’s rent coming due? You may be looking for a loan for rent payments so that you can stay current on your apartment or rental home.

Lenders that provide these unsecured products are grouped into categories.

• Big banks often have the most stringent credit requirements. Many applicants with checkered credit histories are denied these loans. Those that do qualify may be charged higher interest rates. Profits are passed on to Wall Street investors.
• Community banks serve the towns or communities where they are located. They generally have slightly lower interest rates, though they are still for-profit financial institutions.
• Credit unions are nonprofit lenders. They may be more likely to give struggling borrowers the benefit of the doubt. When a borrower experiences additional troubles, credit unions are typically more flexible to workaround agreements than their for-profit counterparts.
• Peer lenders are a new breed of financial institution. These brokers bring together those seeking loans for household bills and other needs with individual investors that place small amounts of money into the loan pool. Peer lending is often a cheaper option for obtaining quick cash than other alternatives.
• Consumer finance companies are where poor households normally turn to. Acceptance rates are higher and so are the loan rates. It can be very difficult to repay these high interest loans when money is tight.
• Payday lenders are the most expensive option. These loans are essentially unaffordable for any family, yet many desperate people choose to commit themselves to these legalized loan sharks. To combat the social problems associated with payday loans, many states outlaw these institutions altogether, though their loans are often still obtained online.

Loans for rent payments are shorter term loans that are used to get you through a temporary cash crunch. There are a few scenarios where this type of loan might be needed.

• A job loss can create a gap in income of a month or more. Even when you start your new job, it can take up to a month to receive your first full paycheck. You still need to be able to maintain a stable home where you can sleep, shower and list the address on your résumé or employment application.
• An unexpected injury can create a financial emergency that might require immediate cash. It could be a late night trip to the emergency room at the hospital. Maybe you or a family member was injured in a car crash.
• Your vehicle may experience a serious mechanical problem that could require expensive repairs. Since you need your car to get to work, you may need to pay the repair shop so that they will release your vehicle back to you. Engine work or a transmission fix could cost well over $1,000, which can easily exceed money you had set aside for your rent.
• Unexpected legal troubles could also set you back. Everything ranging from criminal arrest to traffic citations could cost you big. Domestic issues could cause problems. Unpaid collection accounts may have led to a judgment and subsequent bank account levy or wage garnishment. All can take away your rent money.

A stable rental history is important when you lack other types of credit. It is also what you will need to show a new landlord that you can be trusted to make your rent payments on time.

Right now though, your immediate priority will be to make sure that you do not fall behind on your rent. Taking the steps you need to take now will help you avoid falling behind and then having to deal with preventing an eviction.

Selling unneeded assets can raise quick cash. Working overtime or a second job can also help you fix the problem. Otherwise, short of selling plasma, prostitution or any other ridiculous option, obtaining a loan to help with rent payments might be a more appealing option. If you have children, it might be necessary since you cannot just leave your kids alone, and childcare can create another expense.

Do consider a loan for rent when you anticipate that you will be able to quickly repay the loan over just a couple of months or so when you recover from your short-term financial problems. Don’t even think about it if you find that you are always short of cash and never seem to be able to afford all of your bills. Being honest with yourself about your situation will help you avoid making matters worse by getting into deeper debt.