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If you’ve lost your job or encountered a big emergency expense, you may find you don’t have enough money to pay rent. A personal loan may seem like a feasible fix.
But unsecured personal loans are an expensive way to cover rent and should be considered only in rare situations. You may also have more affordable options, including local assistance for renters.
A personal loan for rent is an expensive option
Taking a personal loan for rent can address a budget shortfall, but you’ll need to consider the risks. Here’s what to know before taking a personal loan to pay your rent.
- Taking a personal loan adds debt. Each month you’ll owe both your rent as well as an installment payment on the new loan. If you take a $6,000 personal loan with an 18% annual percentage rate (APR) and a 12-month term to pay for three months’ rent, you'll now have an additional $550 monthly loan payment.
- You’ll owe interest on the loan. Depending on the APR and repayment term, you could wind up paying as much interest as you would for a couple months’ rent. For example, a $10,000 personal loan with a 25% APR and 36-month term would cost $4,314 in total interest.
- You need a solid credit score and credit history to get a good interest rate. Personal loans with lower interest rates are typically only available to people with good or excellent credit scores (mid-600 score or higher).
- Your credit will take a hit if you miss loan repayments. The most important factor that determines your credit score is payment history or how consistently you make on-time payments on your debts. Missing even one monthly payment can hurt your credit score.
🤓 Nerdy Tip
Many financial experts consider 36% to be the highest interest rate a loan can have to be considered affordable. Be cautious of taking out high-interest loans such as payday loans that have short repayment periods and interest rates in the triple digits. When taking a personal loan for rent may make sense
If you’re thinking of taking a personal loan to pay rent, consider how quickly the loan can be paid back. If you need a loan as a short-term financial raft, and you’re certain you’ll soon have the funds to pay it off, borrowing a small amount may make sense for you.
For example, if you’re starting a new job and you’ll have a temporary gap between paychecks, or you’re moving apartments and need help paying your new security deposit while awaiting a refund of your old one, you may be able to pay off the debt quickly.
But personal loans still come with interest. Calculate your estimated monthly payments using the calculator below to see if a personal loan is an affordable option.
Personal loan calculator
Loan details
2026
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Your loan estimate
Monthly payment
$212.47
Total principal
$10,000
Total interest payments
$2,748.23
Total loan payments
$12,748.23
Payoff date
03 / 2031
Show amortization schedule
Other options for help with rent
Before you borrow, consider these other ways to get assistance with your rent payments.
- Talk to your landlord. If you have a history of making on-time rent payments, your landlord may be willing to offer some assistance. This could come in the form of waived late fees, an installment plan or deferring payment for a month.
- Apply for a small-dollar loan through your bank or credit union. Several major banks, including Bank of America, US Bank and Wells Fargo, offer short-term loans in amounts of up to $500 to $1,000 to existing customers. Many credit unions provide payday alternative loans of up to $2,000 to members. These loans tend to rely on your banking history with the institution, so you can often qualify even if you don’t have good credit. They’re also significantly cheaper than many short-term borrowing alternatives.
- Call 211. 211 can connect you with local social services, including nonprofits and religious organizations, that can help you with rental assistance or help you discuss a payment plan with your landlord. All calls are confidential.
- Supplement your income. Consider ways to make extra money to cover your financial gap. You could get paid to drive for a ride-share service, walk dogs or care for pets on Rover or Wag, tutor online or sell gently used clothes.
- Ask for help from loved ones. Borrowing money from family or a friend will likely come with better terms than borrowing from a traditional lender. You can make the task easier by writing down the terms, including when you’ll pay the loan back and if you’ll pay interest.
- Change your living situation. If your apartment lease allows you to sublet your apartment or rooms within, discuss these options with your landlord. Moving in with a friend or family member for a short period of time while you sublet your apartment could cover your funding gap.
Ultimately, do what you can to build up an emergency fund. Even $500 can help you withstand a cash flow shortage in the future.
» MORE: How much should I spend on rent?
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