Getting Rent Loans When You’re Unemployed: Your Options

Finding yourself unemployed can be an extremely stressful situation. Your income stops, but your expenses don’t. Rent is often one of the biggest monthly expenses, so figuring out how to pay rent when you don’t have a job can feel impossible. However, there are options for getting rent loans even if you are currently unemployed.

In this article, we will cover:

• The challenges of paying rent when unemployed
• Government programs that provide rental assistance
• Private loans specifically for paying rent
• Alternatives like borrowing from family/friends or using credit cards
• Tips for getting approved for a private rent loan when unemployed

The Difficulty of Paying Rent Without a Job

Rent is usually a non-negotiable expense. You sign a lease agreement promising to pay each month. If you don’t pay, you can face penalties, fees, eviction, and damage to your credit.

But when you lose your source of income, coming up with that monthly rent payment can seem impossible. Your savings might cover a month or two, but unemployment often lasts longer than that.

According to the Bureau of Labor Statistics, the average duration of unemployment is over 21 weeks. That’s 5 months of rent you may need to cover after losing your job.

For most renters, covering several months of rent payments without income is simply not feasible. That leads many unemployed renters to seek assistance.

Government Programs for Rental Assistance

The government recognizes that unemployment often leads to an inability to pay rent As a result, there are a few programs that provide rental assistance

1. Section 8 Housing Choice Vouchers

Also known as Housing Choice Vouchers, this program provides vouchers to cover a portion of monthly rent and utilities. Eligibility is based on your annual income – you must be considered “low income” for your area.

To get a Section 8 voucher, you must apply through your local Public Housing Agency. Waiting lists can be very long but you can get on the list even while employed. If you then lose your job the voucher can provide rental assistance once your name comes up.

2. Public Housing

Public housing developments have reduced rent for low income tenants. Rent is typically no more than 30% of your monthly adjusted income. To qualify, you must fall under your area’s low income limits.

Public housing wait lists can be very long. You may be able to get priority if you are homeless or at risk of homelessness due to financial hardship like unemployment.

3. Emergency Rental Assistance Programs

Many states and local governments have created emergency rental assistance programs that provide short-term assistance to renters impacted by COVID-19. These programs help both tenants and landlords.

To get emergency rental assistance, you’ll need to apply through a local program. Eligibility and benefits vary in each area based on funding availability.

4. Rapid Rehousing Programs

Some organizations offer rapid rehousing programs that temporarily pay rent for those at risk of homelessness. These programs typically provide short-term rental assistance and housing stability services.

Eligibility is based on risk factors like unemployment. Contact local shelters and housing agencies to find rapid rehousing programs in your area.

Private Emergency Rent Loans

Government programs, while helpful to many, have strict eligibility requirements, long wait lists, and limited funding. But there are some private companies that offer emergency loans specifically for paying rent:

1. FloatMe Rental Advance

FloatMe offers cash advances of up to $500 to cover emergency costs like rent payments. You receive the money immediately and then pay it back over time.

To qualify, you need regular income of at least $1,200 per month. FloatMe does report payment history to credit bureaus, so timely repayment can help build your credit score.

2. Uplift Emergency Rental Assistance Loans

Uplift offers installment loans from $500 to $5,000 to help cover emergency costs like rent. You can select loan repayment terms from 3 to 24 months.

These unsecured personal loans do require regular income. While you don’t have to be employed, Uplift wants to see $1,200 in monthly income from sources like unemployment benefits, social security, pensions, etc.

They allow credit scores as low as 550, but interest rates decrease above 640. Uplift provides the money within 1 business day of approval via ACH transfer.

3. MoneyLion Rent Advances

MoneyLion offers cash advances up to $250 to help cover emergency costs in between paychecks. To qualify, you need at least $500 in monthly income and a checking account.

The money transfers immediately to your bank account. You then repay it on your next payday through automatic withdrawal. MoneyLion doesn’t do credit checks or report to bureaus.

Borrowing from Family or Friends

Before taking on debt, consider asking trusted family or friends for help covering rent. If possible, agree to repay on a schedule once you find employment without accruing interest.

Be sure to put the agreement in writing to avoid misunderstandings. Only borrow what you realistically can repay within a set timeframe. Don’t damage relationships by overextending yourself.

Should You Put Rent on a Credit Card?

With credit cards, you can essentially borrow up to your credit limit. But this option comes with risks:

• High interest rates – Unless you have a 0% promotional APR, expect to pay 15-25% interest on credit card balances.

• Credit score damage – High utilization can lower your credit score, and missed payments hurt even more.

• Debt spirals – Credit cards make it easy to endlessly borrow more. Avoid this debt trap.

Only use credit cards as a very last resort after exhausting all other options. Have a plan to pay off the balance before high interest kicks in.

Tips for Qualifying for a Private Rent Loan When Unemployed

Unemployment makes it harder, but not impossible, to get approved for a personal loan for rent. Here are some tips:

• Apply with a co-signer – Having someone with income co-sign drastically improves your chances of approval. But be sure they understand the obligation they are taking on.

• Use all your income sources – Lenders want to see you have some ability to repay the loan. Income from unemployment benefits, freelancing, side jobs, etc, can help you qualify.

• Offer collateral – With a secured loan, the lender can take an asset like your vehicle if you default. This lowers their risk.

• Improve your credit – Lenders offer better rates and more approval to those with higher scores. Pay down debts and dispute errors to boost your credit.

• Pick lenders for bad credit – Online lenders like Uplift and FloatMe are more likely than banks to approve applicants with low income and poor credit.

While paying rent without income is very difficult, options are available. Government assistance programs, private emergency loans, and borrowing from family or credit cards can help cover housing costs between jobs. Just be sure to only borrow what you can realistically repay to avoid spiraling into unmanageable debt.