Can You Pay Rent With a Loan?

by Maurie Backman | Updated Aug. 19, 2021 - First published on Jan. 19, 2021

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A calendar with "rent due" written on the first of the month

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The quick answer? Yes. But you may want to explore other options first.


Millions of people have seen their income take a hit in the course of the coronavirus pandemic. If you're one of them, you may be struggling to cover your bills -- especially your rent, since it's likely one of your largest monthly expenses. You may, in fact, be thinking of borrowing money to cover your rent payments. The good news is that a personal loan allows you to borrow money for any purpose. As such, if you take one out, you can use that money to cover your rent and any other bills you may be struggling with. But before you apply for a personal loan, there may be a better solution to your financial problems.

Reach out and ask for help

A personal loan won't harm your credit score the same way credit card debt will, provided that you make your monthly payments on time. But a personal loan will cost you money in interest, even if you manage to secure a reasonable rate on the sum you borrow. Plus, there are closing costs associated with taking out a personal loan, and those vary from lender to lender. You may, however, be charged up to 8% of your loan amount. So for example, if you borrow $8,000, you could be looking at $640 in fees.

Because there are drawbacks to taking out a personal loan, before you apply for one to make good on your rent, it pays to talk to your landlord about the hardship you're facing and ask for leeway. If you're still working in some capacity -- say, your hours have been reduced -- you may only be able to afford $700 a month instead of the $1,200 you normally pay. If that's the case, ask if your landlord will accept $700 as payment in full until your hours at work increase. Or, ask to pay $700 a month now and then catch up on that missing $500 per month once your circumstances improve. There are a number of arrangements your landlord might agree to, so it's worth having that conversation.

Another option is to see if you're eligible for pandemic relief on other bills, which could free up more money to cover your rent. Your utility provider, for example, might let you defer payments for a period of time, as might your auto loan servicer, and that leeway could make it possible to pay your rent in full.

One thing to keep in mind is that while your landlord might want to work with you while you're experiencing a financial hardship, they may also be reliant on your rent payments to cover their own mortgage. While some rental units are owned by huge management companies, a lot of property owners are mom-and-pop landlords who make their living from rental income and can't afford that hit themselves.

How to find the right loan

If your landlord is unwilling or unable to work with you on rent and you've exhausted other options for relief, you may want to apply for a personal loan to keep up with your housing payments. But before you go out and apply for a standard personal loan, consider a coronavirus hardship loan instead. These loans differ from regular personal loans in a number of ways.

Specifically, hardship loans:

  • Are often smaller, ranging from $500 to $5,000, whereas regular personal loans may come with a higher borrowing minimum than you want
  • Tend to offer more competitive interest rates
  • Typically have more flexible payment terms
  • Are designed for people who can prove they've lost income during the pandemic (while a steady income increases your chances of getting approved for a personal loan)

If you're unable to qualify for a coronavirus hardship loan, a regular personal loan is certainly a reasonable choice, but it could pay to apply for the former first, especially if you don't need to borrow that much. For example, if your hours were recently cut at work but your manager expects you to be back to a full-time schedule by April, you may only need help covering three months of rent. In that case, a hardship loan could be a better fit based on the amount you need to borrow and the more favorable terms you'll get on your loan itself.

Borrow wisely

When you take out a personal loan, you can use that money for any purpose. Heck, you could take out a personal loan to buy a TV, go on vacation, or purchase clothing (though borrowing for these purposes is not recommended). As such, it's more than possible to borrow money to keep up with your rent. Just be sure to explore your options for relief before having to add to your debt. Even coronavirus hardship loans charge interest (and some may charge closing costs, though some don't). And while you won't pay as much as you will for a regular personal loan, when you're struggling financially, it's best to avoid any added costs you can.

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