Should you take out a loan for rent payments?

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It can be stressful to realize you won’t have enough money for rent. You may wonder whether you should take out a personal loan to cover it. It depends on your financial situation, but it’s a good idea to look at other options first. Taking out a personal loan for rent should be a last resort.

  • What to know about taking out a loan for rent
  • Types of loans for rent
  • Pros and cons
  • How to apply
  • Should you take out a loan for rent?
  • Alternatives
  • FAQ

What to know about taking out a loan for rent

If you’re struggling to make your rent payment, a personal loan from a bank, credit union, or online lender might come in handy. But keep in mind that you will have to pay interest and any other fees the lender may charge. Plus, you’ll likely need good to excellent credit to get approved and lock in a lower rate.

Before you take out a loan for rent, consider your circumstances. Figure out whether you can afford more debt. If you’re not in a position to repay the loan, you’ll want to look for alternative ways to pay your rent.

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Types of loans for rent

There are a few different types of loans you can choose from to help make your rent payment, including:

  • Secured loans: A secured loan is backed by collateral, such as your house or car. Compared to an unsecured loan, a secured loan usually has a lower interest rate. But if you fail to make your payments, the lender may seize your collateral.
  • Unsecured loans: An unsecured loan doesn’t involve collateral. The rate you receive will primarily depend on your credit. You’ll need a high credit score to land the lowest rates. If you have fair credit or poor credit, you’ll likely have to settle for a higher rate that increases your overall cost of borrowing.
  • Emergency loans: Some lenders offer personal loans for emergencies, such as not being able to pay your rent on time. In most cases, you’ll need good credit and verifiable income to get approved, but some lenders are more lenient than others.
Good to know:

Pros and cons of taking out a loan for rent

The benefits and drawbacks of paying for rent with a personal loan include:


  • Fast approval: You may receive approval as soon as the same or next business day, depending on the lender. You can fill out a short application form online or in-person. It’s also a good idea to prequalify with lenders and check your loan offers in advance.
  • Fast funding: Once approved, you won’t have to wait long for the funds. You may receive them via direct deposit the same day you get approved, the next day, or within a few business days.
  • Multiple uses: A loan can help you pay for rent. But you can also use it for other purposes, like consolidating your credit card debt or financing a home renovation.
  • Paying your rent: The major pro of taking out a loan for rent is that it should allow you to pay your rent on time and avoid the related financial consequences.


  • Good credit is required: Typically, you’ll need good to excellent credit to secure the lowest rates. You may struggle to get approved if you have a bad credit score.
  • Potential fees: Some personal loan lenders charge fees in addition to interest. These might include origination fees and prepayment fees for paying back your loan early.
  • Can put you in a worse financial situation: If you take out a loan for rent and don’t pay it back on time or overborrow, your finances may take a hit.
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How to apply for a personal loan for rent

To apply for a personal loan for rent, follow these steps.

  1. Compare lenders: Explore personal loans from as many lenders as possible. Compare factors like interest rates, terms, and fees to zero in on the best option for your budget and needs.
  2. Choose a loan: Pick the loan with the lowest interest rate and, ideally, the shortest term. Just make sure you feel confident you’ll be able to pay it back on time.
  3. Complete the application: Most lenders will allow you to apply for a personal loan online. You’ll need to provide information like your Social Security number and gross income. Additionally, lenders will perform a hard credit pull, which will affect your credit score.
  4. Get your funds: Upon approval, the lender will distribute your funds. Direct deposit is usually the fastest method.

Learn More: Where can I get a personal loan?

Should you take out a loan for rent?

In general, it’s not a good idea to pay for rent with a loan. But if you’re in need of a quick solution and feel confident you can repay your loan quickly, it may be an option. For example, if you’re between jobs, a loan can cover a few months of rent until you get a paycheck again.

If you know you won’t be able to repay a loan for rent, it’s in your best interest to explore other options, especially if you can’t land a low interest rate and favorable terms.

Alternatives to help with rent

If you decide that paying for rent with a loan isn’t a good option, here are some alternatives to consider.

  • Speak with your landlord: If you have a track record of making timely rent payments, your landlord may be willing to help you. They might waive a late fee or allow you to defer a payment.
  • Ask for family help: Reach out to loved ones to see if they can assist you with rent. Be sure to put your loan agreement in writing and pay them back as you agreed to.
  • Move out or get a roommate: It may be worthwhile to find a new, less expensive place to live or split the cost with a roommate. This can be a temporary solution until you get back on your feet.
  • Boost your income: Think about ways to make some extra money. You might deliver groceries, tutor, or sell items online.
  • Get nonprofit help: Some nonprofit organizations offer housing assistance. A few examples include calling your local 211, Catholic Charities and the Salvation Army.
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What credit score is needed to qualify for a loan for rent?

You’ll likely need good to excellent credit to get approved for a loan for rent, which is typically a FICO score of 670 and up. But some lenders are more flexible and might be willing to extend you an offer, even if you have bad credit or fair credit.

Can I use a loan for rent to cover past-due rent payments?

Yes, you can use a loan to pay for rent payments you owe. But because a loan usually comes with interest charges and fees, it’s a good idea to explore other options first.

How long does it typically take to receive a loan for rent?

Most lenders offer fast funding, so you can receive a loan for rent pretty quickly. Depending on the lender, this may be the same day you get approved, the next business day, or within a few business days.

Are there any government programs that offer loans for rent?

There are government programs that can help you pay for rent. The Department of Housing and Urban Development has a Rent Relief Resources page that’s a good place to search for them.

What happens if I default on a loan for rent?

If you default on a loan for rent, your credit score will take a hit. Also, if your loan was secured to collateral — like your house, for example — you may lose it.

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