Can an Installment Loan Help With Outstanding Rent Payments?

LOS ANGELES - October 23, 2020 - (

​The possibility of missing a rent payment puts you in a precarious position. Keep a roof over your head or risk penalties, late fees, or worse? In a sticky situation like this, you may need to consider your options to help pay rent until money comes in.

Where to start

If you’ve realized that there’s not enough money in your account to cover this month’s rent, try these steps first.

  • Talk to your landlord - If you’ve been a good tenant, they may be willing to work with you and give you a few extra days to scrape together the cash.
  • Use your emergency fund - If you have one, this is an ideal time to use it. If you don’t, this is a great example of why it can be worth it to build up an emergency fund the next time you’re in the black.
  • Know the laws - In times of economic difficulty, federal and local governments pass laws to support tenant rights. Check resources online to see if you are protected if your financial hardship was caused by broader economic issues.

Weighing the pros and cons of a loan

If the overall cost of taking out and repaying an installment loan is less than the cost of rent going unpaid, consider the loan. On the flip side, if there are virtually no negative consequences to a missed rent payment, it might be best to take the hit and pay as money comes in.

Some examples of the negative consequences of missing rent are:

  • Late rent fees - Understand how much, if any, you’ll need to pay if a rent payment is late. These fees are often around $50 or $100, but check your lease agreement or ask your landlord to be sure.
  • Cost of eviction - If you've been struggling financially or have been impacted by hard economic times, it's possible you may be facing several months of back rent coming due at once.  That can feel like an impossible mountain to climb without financial assistance. At a certain point, your landlord may start to consider eviction. Consider that the costs of being evicted include moving costs or even legal fees if things get really ugly.

Now weigh those consequences against those of taking a loan:

  • Interest - Determine how much you’ll be charged in interest by the date you intend to pay back the loan.  You’ll also want to be sure to calculate the fees if you were to miss a payment or repay the loan early.
  • Impact to your credit score - While this is more difficult to quantify, it’s good to know if your credit score will take a hit if you apply for multiple loans. When you apply for loans, certain lenders may do a “hard” credit check, which can ding your score by a few points. Others will only run a “soft” check on your credit, which doesn’t impact your score at all.  It’s also worth noting that some lenders won’t report your request for a loan to the credit bureaus at all, so check with your lender to be sure if you have any concerns.

If you still need money

If you’re facing high late fees or eviction and it makes sense financially to take out a loan, here are a few types of installment loans that can be used to cover a rent payment.

  • Installment loan -​ Direct lenders for installment loans can help you learn how to get money quickly without providing collateral. Installment loans have longer repayment plans, higher principals and may have lower interest rates than other forms of fast cash loans.
  • Paycheck advance loan - If money from a paycheck is forthcoming, a paycheck advance loan could be just the thing to tide you over to pay rent until payday. With proof of income and a checking account, you can often get funds from a cash advance the same day.

Whether you choose to use an installment loan or not, be sure to keep open communication with your landlord about any missed rent payments. If you handle the situation in a timely and professional manner, they may be more likely to help you out if something similar happens in the future.

Notice: Information provided in this article is for informational purposes only. Consult your attorney or financial advisor about your financial circumstances.

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