Rent is going up and up with each passing month in Canada, with the national median now over $2,000.
Making monthly rent payments is a struggle for many across the nation. With these aforementioned rental costs combined with inflation and other financial stressors, too many people are living from paycheck to paycheck. Even the most frugal person might fall short on rent under these conditions.
In failing to pay rent on time more than once in a while, you risk being evicted. In 2021 alone, there were over 200,000 evictions in Canada. If you want to avoid the consequences of eviction, figuring out an alternative way to come up with rent money might be necessary.
In this post, we’re going to discuss the idea of taking out a short-term loan to pay rent. We’ll look at some of the pros and cons to help you determine if this is the right move for you. There’s nothing more stressful than being low on rent, so keep reading and see if taking out a loan can help.
The Pros of Paying Rent With a Short Term Loan
There are numerous positives to taking out a loan for rent payments. Here are a few examples:
Build Credit History
Building up your credit will allow you to apply for larger loans with better repayment terms in the future. If you’ve struggled with maintaining and improving your credit score before, this is a great way to get started.
That said, you need to be diligent when paying your loan back. If you miss payments, it’s going to have a detrimental effect on your credit score. You should use the money exclusively to cover your rent and make sure you’re budgeting properly in order to pay it back on time.
Meet Your Borrowing Needs
Many short term lenders offer a wide range of loan amounts. Some will offer as much as $50,000, though it’s not recommended that you apply for that much just to help pay your rent.
It’s actually better to choose a lender that restricts how much you can borrow until you’ve established a rapport. At King Cash, the first time you apply for a loan with us, you can only get $500. Once you’re established as a customer, however, you can apply for greater loans to help with most financial struggles.
Quick and Easy
Applying for an emergency loan should always be quick and relatively painless. These days, it’s extremely easy to compare loan terms and amounts online to determine which one is best for your situation. In some scenarios, you can be approved for a loan within minutes and have the money within a day.
We always strive to provide our customers with the most stress-free application process possible. All you need to do is fill out a simple online application, and we’ll review it in minutes.
The requirements are simple. You need to be a Canadian citizen over 18 years of age with a Canadian bank account and a monthly income of at least $1,200. Beyond that, you just need to prove that you have few (or no) non-sufficient fund transactions and you’re not considering bankruptcy.
No Credit Check Necessary
Many folks with financial woes tend to avoid applying for personal loans even in a crisis because they feel that their credit is bad and they’ll be denied. With our crisis loans, you don’t need to worry about a credit check at all, let alone being denied because of one.
So long as you satisfy the requirements listed above, there’s no need for us to check your credit. You get all of the benefits of a regular loan, including building up your credit, without the fear of being denied.
Flexibility
Fast cash loans can be extremely flexible. When you take out one of our short term loans, you can choose how fast you pay it back. Choose between 3, 6, or 12 installments based on what works best with your financial limitations.
This is a great alternative to traditional lenders that have much more stringent payback requirements. If you want flexibility, a short term loan is the way to go.
The Cons of Paying Rent With a Short Term Loan
Using a personal loan for rent isn’t the right solution for everyone. If you’re worried about any of the following, you may want to seek alternative financing.
Interest
The first thing to note is that there’s interest with personal loans. It’s always important to take a look at the fine print to determine what your repayment terms look like. Generally speaking, the longer your repayment term, the more interest you’ll end up paying.
This means that you’ll end up paying back more than you borrow. Interest is how the lender makes money from the transaction.
Potentially More Debt
Of course, if you fall behind on your loan repayments, you could be looking at more debt than you originally had. When you take out a short term loan to help with rent payments, you need to be sure that you’re going to be able to pay it back in a timely manner.
If you can’t, you’re risking a major hit to your credit score and ability to secure loans in the future. It also puts a bind on you in the short term, as lenders may be forced to enlist a debt collector to get the money back.
It’s Hard to Estimate Future Needs
It can sometimes be tricky to figure out how much loan to apply for. Going too low may not cover your rent payment needs, while going too high will make repaying the loan too difficult.
We try to combat this uncertainty by limiting your first loan application to just $500. Once you’ve established your ability to work with our repayment terms, we allow you to continue applying for loans without any red tape whatsoever.
Should You Pay Rent Using a Short Term Loan?
Now that you know some of the pros and cons of getting a personal loan to pay rent, it’s time to decide whether or not it’s the right move for you. It’s certainly not without risks, but with a great lender; your finances will be well looked after while giving you the boost you need to get over the hump this month.
To apply for your first loan, head over to our site and fill out our online application. Within a few minutes, you’ll be approved for your loan, and you’ll have that bit of extra cash that you need.
