How to Pay Your Rent: Should You Take Out a Personal Loan?
Moving out or changing homes is a huge milestone. When it comes to renting out an apartment, there's many things that you should consider. Renting an apartment is much cheaper than buying a home.
The latter requires you to pay a hefty downpayment and deal with closing costs. But even if renting is not as expensive as buying a home, it still isn't cheap. This is because you'll be dealing with various costs, such as your first and last month's rent, moving fees, security deposits, and more.
With the mountain of fees you need to pay, there's no doubt that first-time renters can get overwhelmed with all the money they need to put aside. In that regard, renters with little income get creative in finding ways to get more cash for rent, such as applying for a personal loan.
However, is this the right option for you? Should you even take out a personal loan to pay your rent?
Why Should I Take Out a Personal Loan to Pay For Rent?
Personal loans are flexible loans that can be used for different purposes, from consolidating your debt to home repairs, auto repairs, and other expenses. Seeing as it's a versatile loan, you can use your personal loan to pay for rent.
Most financial institutions, such as banks, credit unions, and online lenders, offer personal loans. And since most of them aren't strict about how you use these funds, you can ultimately pay for rent with a loan.
No Collateral Required: There are two types of personal loans — secured and unsecured. Unsecured loans don't need collateral and only require good credit history. On the other hand, secured loans can offer lower interest rates and give you higher chances of approval if you provide a security deposit.
You Have Good Credit: To get approved for a loan, you need to have good credit. This is crucial for lenders to mitigate their risks, so they'll also verify your employment and your income.
What are the Benefits of Using a Personal Loan to Pay for Rent?
Pro #1: You Get to Build Your Credit History
Even if you have an existing credit history, getting a loan can help improve your credit score. However, you can only improve your credit history if you pay your loan payments on time every month. Trust us — having a good credit score is a huge deal as it can help you qualify for a loan in the future.
Pro #2: Different Borrowing Ranges
Personal loans can range from $1,000 to $50,000, and the amount that will be approved for you will be based on your income and credit score. However, note that you should only borrow what you need even if you qualify for a huge amount.
The funds you receive can cover your rent for long periods, allowing you to keep rent for six to 12 months.
Pro #3: Works as a Financial Cushion
If you think you don't have enough income at the moment to live on your own. You can use a personal loan as a safety net to keep the funds in your savings. When you have a financial cushion, you'll feel more secure and confident about moving out sooner and living on your own.
Pro #4: Easier Approval
Loans can be tricky, especially when it comes to approvals. Fortunately, unsecured personal loans are pretty attractive since they don't require collateral. However, it's easier to qualify for a secured loan if you have a desirable credit score.
The Bottom Line: A Personal Loan is Can Definitely Help You Pay Rent
Moving out can be tricky, and besides being on top of your monthly expenses, you also need to worry about paying your monthly rent. Fortunately, getting a personal loan is a great financial solution that can help you get through every month's rent. Of course, it's best to work with a credible loan company to ensure you get the security you need.
How Can We Help You?
If you're thinking of getting a personal loan, it's only right that you connect with a reputable loan company to ensure you get the financial assistance and security you require.
Mid-Town Finance has been serving Huntsville since 2000. Our team provides straightforward, fair, and honest loans. With that, we give each individual the opportunity to receive the financial assistance they need.
Inquire about a loan today and see how we can help you!