How To Pay For Rent With The Help of Loan Fast and Safe

Accommodation, food, water, and air are the basic needs a human being needs to survive. If any of these needs are deficient, the possibility of an individual surviving is drastically reduced.

Due to the urban migration, increase in the cost of living, inflation, and increased population density in some places, housing prices have skyrocketed. 

In a recent study in the United States of America, prices of houses increased by over 18% in September 2021, and in the third quarter of 2021, it increased by 16.8%. The price of accommodation reached its all-time high in September 2021. Statistics show that prices are rapidly rising, especially from the start of the 2021 year.

Source: ceicdata.com

This increase in the cost of housing makes it difficult for some people to afford to house.

In getting accommodation, an individual can either buy the house or rent it. Buying a house can be very expensive and not everybody can afford to buy a house so at times renting can be an easier option. 

Renting accommodation can be affordable but during trying times we might need a loan to bridge the gap. An individual in need of help paying rent ASAP can get a loan on the fitmymoney website.

There are different types of loans we can use in paying our rent. The question on our mind should be “What are the types of loans you can use to pay for rent?”

Types of Loans You Can Use To Pay For Rent

There are several types of loans we can use in paying for rent, examples are:

  • Personal Loans
  • Payday Loans
  • Credit Cards

Personal Loans

Personal loans are one of the most used credit products. Personal loans are a quantity of cash you can borrow for various projects such as home improvements, vacations, etc.

Personal loans are mainly unsecured which means that they do not require collateral to get, but there are some personal loans plans which are secured.

Unsecured Personal Loans

Unsecured Personal Loans have no collateral attached to it hence the lender compensates for that by increasing the interest rate. The lender checks the ability of the borrower to pay back by reviewing the individual’s credit score, debt-to-income ratio, and income if after the lender reviews an individual ability to back and the lender views the person as high risk, the lender might deny the person or charge and higher interest on the loan.

Unsecured personal loans can be taken out to be used for rent. In unsecured personal loans, there is no collateral hence if the debtor defaults, the lender can’t seize any property except he gets a court order.

Secured Personal Loans

Secured personal loans have collateral attached hence the interest here is lesser than that of Unsecured personal loans. A secured personal loan may be easier than unsecured personal loans to qualify. 

Secured personal loans are a nice loan option that can be used to pay for rents but, if you are not able to repay the loan within the repayment window, the lender can seize the collateral.

Payday Loans

Payday loans are short-termed, unsecured loans that are often characterized by increased interest rates. Payday loans online same day are usually paid off when our next paycheck arrives, but some lenders give more time.

Payday loans are a nice option for paying rent but like every credit service, if the loans are not repaid within the repayment window, it would have an adverse effect on our credit score.

Credit Cards

In cases that our landlord accepts credit cards, we could pay our rent with a credit card, and we able to pay off our statement balance on time and in full before the date, it is due so as to avoid paying additional charges. Our Credit cards have a lower Annual Percentage Rate (APR) than most short-term loans.

Is It a Good Idea To Pay Rent With The Help of a Loan?

Rent paying is not a bad idea, it is more economical than buying a place to stay in. Renters are not obligated to pay for the expensive repairs or improvements associated with homeownership. Rent paying in most cases is literally more intelligent than paying for a house out rightly.

Pros And Cons of Paying For Rent With Personal Loans

Paying for rent with personal loans can be a savior during trying times but like withal credit options, it has both pros and cons:

Pros

  • Collateral is not required. If you are allowed to get an unsecured personal loan, collateral is not needed. 
  • May be cheaper than cash advances. Making use of personal loans in paying for rent is actually cost-effective than getting a cash advance from our credit card to use in paying for rent. 
  • Fast payout. Due to the increase in the number of credit institutions offering personal loans online, personal loans tend to have very fast approval and payout time.
  • Loans can be used for multiple projects. Personal loans can be used for different types of projects such as home improvements, rent-paying, vacationing, etc. You can also use personal loans to consolidate credit cards.
  • Improve credit score. Payment history amounts to 35% of your credit score on the FICO scale, so repayments of personal loans during the repayment window helps in improving our credit score.

Cons

  • High-interest rate. Most personal loans are characterized by increased interest rates due to most of them being unsecured. The lender charges an increased interest rate in order to make a profit.
  • Additional fees. There are loans without additional fees, but most lenders charge some additional fees like origination fees, prepayment penalties, and charges for late payment. When applying for personal loans make sure you check out for these additional fees before accepting loan terms.
  • Damage to credit score. If you don’t repay the loan during the repayment window, you risk damage to your credit score.

     

Alternatives To Pay For Rent

Rent paying might be quite tiring, so to ease the stress of paying for rent one can do the following:

  • Rental Assistance Programs.
     
  • Move to a cheaper location.
     
  • Get a roommate.
     
  • Increase your Income.
     
  • Get money from family.

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Rent paying is a quite economical method of getting accommodation compared to purchasing a house. Loan options make paying for rent quite burden-free but, when using we must be careful in order to avoid running into debt.  

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