Should I Get an Emergency Loan to Pay My Rent?
Summary
Thinking about using an emergency loan for rent? Learn how emergency loans work, what to consider before borrowing and what alternatives may be available.
In this article:
Life can be unpredictable, and even the most carefully planned budget could fall short at times. Maybe your hours at work were cut or an unexpected expense means you no longer have the money you set aside for rent.
An emergency loan could be one way to cover your rent and keep things on track while you regroup financially. Whether you choose to borrow or go a different route, you want to take healthy next steps that help you stay in your home and protect your financial health.
Let’s explore more about how emergency loans work, when they might make sense and what to consider before applying.
What is an emergency loan?
Emergency loans refer to any money borrowed for an unexpected event. There are different types of loans that can be used to get you money quickly for emergencies.
An emergency loan gives you a lump sum of money that you agree to repay over time, often in monthly installments, and includes interest (the cost of borrowing money). The amount you can borrow and the repayment terms vary depending on your credit history, income and the type of loan.
Alternatives to emergency loans
Depending on your situation, there may be ways to manage your rent that don’t involve borrowing right away. Here are some other options to consider before taking out an emergency loan to pay your rent.
Talk to your landlord
Start by having an honest conversation. Your landlord may be willing to work with you, especially if you have a history of paying your rent on time. They might even agree to a short-term payment plan, waive late fees or give you extra time to catch up on your rent payments.
Borrow from friends and family
It may be uncomfortable, but asking a trusted friend or family member for a loan could be an option. Be upfront about how much you need and when you can repay it. Establish the terms of your loan in writing, so you’re both on the same page. Borrowing from friends and family may cause issues in your relationship, if you can’t repay the loan.
Look into rental assistance programs
Many nonprofits, government agencies and community organizations offer support for people facing housing challenges. Rental assistance programs may also help cover part or all of your rent.
Take side gigs or sell used items
Taking on a short-term side hustle or selling items from around your home could be a fast way to raise extra money. Even a small boost might help close the gap and get your rent paid.
Types of emergency loans for rent
Before you decide to pay your rent with a loan, it’s important to keep in mind that not all emergency loans work the same way. Knowing your options might help you make the best decision for your situation.
Personal loans
A personal loan is one of the more flexible types of loan you can use in an emergency. You can get a personal loan from a lender, like OneMain, or from a bank or credit union. Personal loans may be secured or unsecured.
Secured: Secured loans are backed by something valuable — like your car — called collateral. Using collateral may help you qualify for a lower interest rate and borrow a larger amount than you could with an unsecured loan. A secured loan could also improve your chances of qualifying even if you have less-than-perfect credit. Just remember that if you don't make your loan payments, the lender has the right to take away your collateral to recoup their losses.
Unsecured: No collateral is needed, but your credit score and income are key during the process of reviewing your application. Since there’s no asset involved with an unsecured loan, lenders will consider your financial history more closely. However, because there’s no need to evaluate collateral, the process may involve fewer steps, so you could get funds slightly faster in an emergency.
Depending on the lender, you may be able to choose how long you take to repay a personal loan — terms usually last between 2 and 5 years. A longer term generally means lower monthly payments, but a shorter term could mean you pay less interest overall.
OneMain offers personal loans from $1,500-$20,000 with fixed monthly payments, so you always know what you owe each month. Fixed payments could help you plan your budget and avoid surprises.
Short-term loans
In a pinch, you may consider taking out a short-term loan to make rent. While short-term loans can also provide quick access to cash, they often involve higher costs and risks than personal loans — and may not support long-term financial health.
Title loans
A title loan is a short-term, high-interest loan that uses your car title as collateral. While these loans may provide quick access to funds, they carry significant risks. Repayment terms are short, usually 15 to 30 days. Plus, if you can’t pay the loan off in time, you risk high fees and losing your vehicle. Title loan APRs are often around 300%.2
Like payday loans, title loans are prohibited in many states and may be expensive and difficult to pay back, so you might want to look into alternatives first.
Pawnshop loans
With a pawnshop loan, you leave a valuable item — like jewelry, electronic equipment or a musical instrument — as collateral in exchange for a small loan. If you repay the loan (plus interest and fees) within the agreed-upon time, you get your item back. If not, the pawnshop keeps it and can sell it.
Pawnshop loans typically have more than 100% APR and short repayment periods, generally 30 to 60 days.3 Pawnshop loans may be suitable for urgent, small money needs, but generally aren’t ideal for covering ongoing expenses like rent.
Payday loans
Payday loans are short-term, high-cost loans with payment in full expected on your next payday. Payday loans are known for their fast approval process, but they come with a major downside: extremely high interest rates. In some cases, payday loans may carry an annual percentage rate (APRs) of 400% or more.1 APR represents the total cost of borrowing money, including interest and fees.
Because of their high cost and short repayment window, payday loans are risky and often lead to a cycle of growing debt. States that allow payday loans strictly regulate them while other states have outlawed them. Proceed with caution, and explore other options first when possible.
When an emergency loan for rent might make sense
While taking out a loan may not be your first choice to pay your rent, there are situations when it could be a reasonable decision. Below are some examples of when an emergency loan might make sense for you:
- Rent is due now, and you risk eviction if it goes unpaid.
- You have a steady income and are confident in your ability to repay the loan on time.
- You’ve exhausted other resources, like rental assistance programs or savings.
- The loan terms are fair, and you’ve found a lender offering a reasonable APR and manageable repayment terms.
Questions to consider before taking out a loan for rent
Before applying for an emergency loan, ask yourself these important questions:
- Can I afford to repay what I owe along with my other bills? Taking out a loan may bring more stress if it doesn’t fit into your budget.
- Will this loan create a bigger financial hole next month? Borrowing now may mean cutting expenses or missing bills later to repay the loan on time. Be realistic about repayment.
- What are the interest rate and repayment terms? Always read the fine print. Know how much you’ll pay in total and how long you have to repay the loan.
- Have I explored all my options? You may find help through grants, rental assistance, or other community resources without taking on debt.
Thinking beyond your current situation could help protect your future stability.
Cover the gap today, stay on track tomorrow
Falling behind on rent may seem overwhelming, but you’re not out of options. Whether you decide to take out an emergency loan or explore alternatives, remember the goal isn’t just getting through this month — it’s protecting your financial health for the future.
If you choose to take out an emergency loan, make a plan to repay the loan on time. If you seek help, know there’s no shame in asking so you can get the money you need in an emergency. Whatever path you take, you’re taking steps toward stability — and that’s a reason to be proud.
Sources
This article is for general education and informational purposes, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any purpose and is not intended to be and does not constitute financial, legal, tax, or any other advice. Parties (other than sponsored partners of OneMain Financial (OMF)) referenced in the article are not sponsors of, do not endorse, and are not otherwise affiliated with OMF.
