Many renters have found themselves behind on rent due to lost income during the pandemic. Federal protections have paused evictions, but not stopped unpaid back rent from building. For people who have found themselves facing several months’ rent in all at once, they might be worried about coming up with such a large amount of money in a lump sum, even if they’ve returned to work.
For most people, their financial priority is to keep a roof over their family’s head. No one should need to worry about eviction in the middle of a pandemic, and online installment loans may be able to help. Here is a step-by-step guide to help people evaluate when to take out a loan to pay rent, and how to find the right loan for them.
Step One: Renters should communicate with their landlord
Many landlords want a tenant that’s fallen behind on rent to pay what they owe and remain living there — they don’t want to evict. After all, an evicted tenant means the past-due rent is simply lost. Depending on their location, some landlords may also be worried about finding new tenants or lowering rent prices.
Being proactive with a landlord and sharing a plan to pay back overdue rent can pay off in a big way. Landlords might be willing to cooperate on a payment plan that works for both the landlord and the tenant, or even be willing to offer a discount in exchange for a lump-sum payment.
Step Two: Check legal regulations and tenants’ rights
Many people don’t take advantage of all of the rights they are entitled to as a tenant. These laws vary by state, so it’s important to research the specific protections different states have in place.
What’s more, tenants may have new protections due to COVID-19, both on a federal and state level. Unfortunately, how protected tenants will be by federal action is still unclear due to competing congressional bills, so it’s hard to be confident in what these legal protections will look like. Relying on eviction pauses can also be tricky, as it will lead to even more rent owed at the end of the pause.
Step Three: Check out available loan offers
After deciding that an online installment loan is the best option for paying rent, the next step is to evaluate available installment loan offers. Some things that may affect which loans people can qualify for include their debt-to-income ratio and their credit score.
But renters that don’t have perfect credit or already have debt don’t need to panic. It’s possible to get an online installment loan for people with bad or fair credit.
After getting a sense of what offers someone might qualify for, they should make sure they understand and agree with the terms of the loan — meaning when payments are due, how much each payment is, and any fees associated with the loan.
Step Four: Have a plan for repaying the loan
Before taking the plunge and signing up for a loan, a borrower should sit down with a calculator and figure out how to make loan payments work for their finances. Paying small installments can be much easier than paying lump-sum back rent, but it might still require cutting back on expenses in order to make room in your budget.
This is a vital step so that the debt of a loan doesn’t snowball, where borrowers end up taking out future loans to help pay an older loan. Paying rent with a loan may make sense if it’s necessary to keep someone’s life stable, but it shouldn’t lead to a cycle of growing debt.
Notice: Information provided in this article is for informational purposes only. Consult your attorney or financial advisor about your current financial circumstances.
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Original Source: How to Use Online Installment Loans to Pay Rent
