The Best Ways to Afford Your Rent
If you are struggling to make your rent payments, there are several ways to help you stay afloat. Some of these methods include paying your rent using your credit card, setting up automatic payments, finding a roommate, and getting a personal loan. However, they all have their drawbacks.
Paying rent with a credit card
Paying rent with a credit card is convenient and flexible, and it can also earn you rewards, which can help offset the convenience fees. However, this method is not without risks, especially if you have limited credit or bad credit. If you use your credit card for rent payments, make sure to increase your credit limit and pay off the balance each month in full.
Paying rent with a credit card is possible, but many landlords do not accept credit card payments. Also, landlords that do accept credit cards usually charge a processing fee. This fee can be up to 2.5% or even 2.9% of your monthly rent, according to Experian. This means that you could be paying $30 to $35 a month in processing fees.
You can also use third-party payment systems, like Plastiq, to pay your rent. These third-party payment systems typically charge a flat 2.5% fee, but it only makes sense if you're getting a signup bonus from a certain bank.
While many people would prefer to pay their rent using a credit card, many landlords will only accept cash or checks. You may even have to pay a processing fee of 2.5% to 2.9% of your rent payment, which can add up to a significant amount.
Rent payments are your largest monthly expense. Using a credit card for rent payment may help you stay within your budget and meet your minimum spending requirements. It can also help you avoid making unnecessary purchases. The best credit card for this purpose is a rewards credit card, which can offer a high return on your spending.
Setting up automatic payments
If you're having trouble affording your rent, you might consider setting up automatic rent payments. It will help you save time, as you won't have to write out a check each month or worry about the cost of processing rent checks. It's also convenient for landlords, since it minimizes the risk of missed payments and reduces the amount of administrative work required.
You can also set up reminders on your calendar or phone. Set them to pop up as a notification and set a sound to go along with them. You can set as many reminders as you want. You can also schedule them to appear at certain times, such as when you're at work, so that you don't miss them.
Another option is using credit card payments. Many tenants prefer this option because it's convenient. However, in order to accept credit card payments, you must have merchant services set up through your bank. These services can be set up online. Alternatively, you can set up a mobile payment service so that your tenants can make their payments from anywhere.
Many rent payment services offer automatic payment options. Some even allow renters to pay their rent through their mobile phones or email. A popular option is Paypal. It works as a digital wallet that you link to your debit or credit card. However, you must be aware that it can take a few days to receive money from this method. This means that tenants should set up their automatic rent payments as soon as possible.
Automated payments are the easiest way to get your money to your landlord. Automating payments also saves you time, and can eliminate the hassle of cashing checks and envelopes. Automated payments can also help your credit score.
Taking out a personal loan
If you're struggling to make ends meet, taking out a personal loan to afford rent payments is a viable option. This type of loan has fixed interest rates and can be paid back within 12 months, which makes budgeting easier. But a personal loan is not a good option if you don't have a good credit history.
In addition to adding to your debt, taking out a personal loan to pay your rent can be bad for your credit. It will lower your credit score and could lead to further financial hardship in the future. It also doesn't work toward the goal of asset ownership. So, you should be sure you can afford the monthly payment before applying for a personal loan.
A personal loan can help you cover your rent and other monthly expenses. The amount you borrow will depend on your income and credit score. If you're renting a studio for $900 per month, a personal loan can help you afford the rent for a year. You can then save the other $1,000 to put toward an emergency fund.
When taking out a personal loan to afford rent payments, it's essential to remember that it can be difficult to repay it, and if you don't have a sufficient emergency fund, you could end up paying more than you borrowed. Therefore, it's important to consider the long-term repayment plan before deciding whether you can afford to keep living in the home you've rented for a year.
The best way to avoid using a personal loan to pay your rent is to build your savings. Although it may be tempting to borrow money to pay the rent, this type of loan will not be sustainable and could even lead to further debt. As a rule, you should never borrow more money than you can afford to pay back. The extra money can be used to solve other problems.
Getting a guarantor
Asking a friend or relative to be a guarantor is a good idea if you can't afford to make rent payments on your own. However, landlords have strict standards for guarantors. Therefore, you should make sure that you give the person you're asking ample time to consider whether he or she will be able to afford rent payments on your behalf. Also, provide them with documentation that proves your ability to pay the rent on time. This means showing your guarantor your credit report. It's also important to disclose any bad marks on your credit report.
The best guarantors are relatives or close friends. Often, landlords prefer to have guarantors who live in the same city or state as the tenant. However, landlords are more likely to accept guarantors who live outside of the state, as long as they have a stable income and have good credit.
Guarantors must be aware of the potential negative effects of defaulting on rent. Failure to make rent payments can result in late fees or collections that affect the guarantor's credit score. If the landlord doesn't receive the rent payments on time, he or she can sue the guarantor or even hire a collection agency to collect the money. Ultimately, this can lead to eviction.
Before asking a friend or family member to act as a guarantor, you need to ensure that they can afford the rent. They should earn 80 to 100 times what you will be paying. If the landlord does not require this proof, you can also check with the landlord directly. They can require other financial documents, such as tax returns or a letter of employment. If your guarantor is self-employed, you can also request a certified public accountant's statement. However, it's important to remember that this person will be responsible for missed rent as soon as you sign the lease.
