5 Good Loan Options If You Need Assistance Paying Rent

Nina Takona

Nina Takona

Published on: 14 October, 2022

Updated: 24 March, 2023

Couple with dog on couch reviewing documents with computer

When the COVID-19 pandemic hit at the beginning of 2020, the economy took a turn for the worse. Millions of people lost their jobs, and an estimated 12 million renters defaulted on their monthly rent payments. Work and school turned virtual; many renters saw this as an opportunity to relocate to more affordable cities or use their newfound bargaining power to negotiate a lower monthly rent payment.

But now as the pandemic fog lifts, landlords are hiking apartment costs. Many renters who benefited from pandemic prices are struggling to keep a roof over their heads.

You may be in this situation—but you don’t have to be.

To help you get through the month, you can apply for a rent payment loan from a traditional financial institution or a friend/family member. There are even federal and state rental assistance programs for people who have fallen behind on their rent payments. Read on to discover which option is best for you.

5 Types of Rental Assistance Loans

Without further ado, here are five types of loans that will help you get through the month.

1. Personal Loan

There are three widely accepted reasons you should take out a personal loan—to at a lower interest rate, to invest, and to pay for an emergency expense. I don’t know about you, but avoiding an eviction notice seems like an emergency. 

A personal loan is one of the most flexible loans out there, which means lenders put few limits on how it can be used. To get approved for a personal loan with a desirable interest rate, you must have a good credit history. 

To add to their flexible nature, these installment loans can be short-term (which often means that they have a repayment period of 1-2 years) or long-term. Additionally, some lenders don’t charge additional fees like origination and prepayment fees. So before you settle on one, make sure to shop around.

2. Emergency Loan

Do you need your rent money like yesterday? Then you should apply for an emergency loan. Whether secured or unsecured, an emergency loan is often approved quickly by providers, and the money is deposited to your bank account by the next business day.

One advantage emergency loans offer is that the borrower doesn’t always need to have a good credit score. For example: if you have bad credit, you can still qualify for an unsecured emergency loan—which typically isn’t awarded based on the borrower’s credit report.

However, be cautious when choosing where and hot to get an emergency loan. Certain emergency loans, like payday loans, have high interest rates and can leave you drowning in debt.

Three women at desk looking at smartphone

3. Cash Advance

A cash advance is a short-term loan that’s accessible through your credit card issuer. There are a few things to know about a cash advance:

  • Its APR is higher than your regular rate.
  • It has a separate credit limit.
  • It can have lots of extra fees, from percentages to flat fees to high late fees.

That is to say, you should reserve a cash advance for when you’re in dire need of emergency funds. 

4. Loans from friends, family members, and people you trust

You might be asking yourself, “Why ask a loved one for money when banks and credit unions exist?” After all, it can be embarrassing and you might worry they’ll judge you. But asking someone you know for a loan has its unique benefits.

For one, there’s more room to negotiate the repayment terms and interest rate defined on the loan’s . If you’re lucky, you won’t have to pay an interest rate at all, and your payment plan will be relaxed.

Moreover, a friend or family member probably won’t care to pull your credit report before agreeing to lend you money. Unlike traditional lenders, you can expect not to have any hidden fees or a lengthy application process.

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This is where a platform like Pigeon comes in handy. You can create a loan any time for free and agree on your desired terms together, while still having protection and a legal framework that makes the entire transaction safer and less awkward for all involved. 

5. Student loans

You might be wondering whether your student loans can be used to cover living expenses. The answer is yes. If you’re in college, student loans can cover your tuition, room and board, transportation, books, and other expenses. This is called the cost of attendance (COA) and it’s already included in your financial aid. Everyone’s COA is different and it highly depends on whether you live on-campus, off-campus with roommates, or with your parents.

Now onto the good stuff: how can you use student loans to pay for rent?

First, financial aid is disbursed to your school, which then deducts your tuition, meal plan, and room and board (if applicable). If any funds remain, the school will release them to you in what is known as a “credit refund.” Your credit refund can go towards your rent and other living expenses.

Man sitting and staring at laptop

When is it a good idea to take out a loan to pay rent?

Typically, taking out a loan to pay rent should be avoided like the plague. But there are some situations that warrant it. Case in point: if you’re relocating for a job and need to cover the security deposit. 

Alternatively, if you know without a shadow of a doubt you can afford the monthly payments then applying for a loan to pay rent isn’t such a bad idea. Of course, you should steer away from frequently taking out a rent loan—even if you can pay it off.

When is it a bad idea to take out a loan to pay rent?

Do you foresee yourself being unable to repay the loan? Are you already in debt? This is a sign you shouldn’t take out a loan to pay rent and should instead look at alternatives.

Alternatives to rent loans

Child in moving box with parents smiling in background

Believe it or not, there are multiple ways to get rent assistance or otherwise avoid opening a loan to pay rent. 

  • Rental assistance programs. Government agencies like the Department of Housing and Urban Development (HUD) or non-profit organizations often give housing assistance to low-income families and individuals. 

  • Move somewhere cheaper. If paying your current rent is a recurring problem, then it’s worth it to move to a cheaper apartment or share the cost with a roommate or several roommates.

  • Live with family. For most adults, moving back in with family after living alone is undesirable. But it may be worth considering for a few months if it means you’ll get back on your feet.

The Bottom Line 

It’s scary to realize you don’t have enough money to cover this month’s rent. It might be because you’re in between jobs or because you’re covering unexpected expenses. Depending on your financial situation, however, it may not be such a bad idea to take out a short-term loan to pay rent and bridge the gap.

There are different types of loans available to renters, ranging from unsecured personal loans to secured auto loans. In addition to borrowing money, renters can receive rent assistance from government agencies and non-profit organizations. 

It’s important to remember that if you’re having a hard time paying rent, there’s always somewhere to turn for help.

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About the author

About the Author

Nina Takona


Nina Takona is a financial and business journalist based in Seattle. She holds a Bachelor of Arts degree in Communications and Media from Daystar University and a Master of Arts in International Relations from United States International University. She has written for numerous sources on the topic of business and personal growth; she has extensive experience in the financial services industry. Nina is passionate about helping readers make smart financial decisions and uses Pigeon to share her knowledge and insights.