Where should you turn next if your rent payments are in arrears and you face the prospect of losing your apartment through eviction?
An ounce of avoidance is worth a pound of cure.
An emergency eviction prevention loan might cost an ounce (origination fees plus interest charges) while helping you avoid pounds of direr consequences (moving expenses, security deposits, credit report black marks, etc.).
Of course, borrowing money only makes sense once you have exhausted all other alternatives, such as asking family members for help and tapping into government support programs for low-income families.
Emergency Eviction Prevention Loans
Emergency loans can help you prevent an eviction if you need money for rent because of a temporary cash shortfall. Of course, you will need a steady income source from employment or government benefits to pay the money back.
Before borrowing money for rent, ensure you have researched all of the alternatives and know your legal rights.
- Government-run emergency rental assistance programs provide funding to needy families, and billions of dollars remain in agency coffers waiting for applicants to claim the money.
- The COVID-19-inspired eviction moratorium issued by the Center for Disease Control (CDC) expires on October 3, 2021, in counties with “substantial virus transmission risks, ” or about 80% of renters.
- Your state may have a separate eviction moratorium on the books that extends beyond the October 3, 2021, expiration date for more tenants. For instance, New York and California have such laws.
Emergency Eviction Loans
Request an emergency personal loan (Sponsored Link) if you need money to pay your rent tomorrow or shortly after to prevent eviction. If approved, the lender could deposit funds directly into your checking account within days – allowing you to meet your payment deadline.
Borrow money during a financial crisis only as a last resort. Please make sure to exhaust other forms of assistance before taking this step. Remember, you must repay the lender while also funding future rent obligations at the same time.
Depending on your credit score, you may wind up merely delaying eviction rather than preventing it while adding extra costs into the equation. Consider these rough estimates.
| Credit Score | Origination Fee | Interest Rate | Loan Term |
|---|---|---|---|
| Excellent: 720+ | 1% | 8% | 3 Years |
| Good: 660 – 720 | 3% | 15% | 1 Year |
| Fair: 500 – 660 | 4% | 25% | 6 Months |
| Poor: Below 500 | 5% | 35% | 8 Weeks |
Assistance Loans
Beware of deceptive labels when researching emergency rental assistance loans. In most cases, private lenders are not offering a helping hand via lower borrowing costs or forgiveness in the future.
Instead, a loan offers assistance by charging less than an eviction might cost. The origination fees and interest charges pale compared to these expenses you might prefer to avoid when vacating your apartment.
- Hiring movers to transport furniture and belongings
- Funding the security deposit on your next rental unit
- The negative impact of an eviction on your credit report
Direct Lenders
Attempting to find an emergency loan from a direct lender may not be ideal when you need money to pay rent tomorrow. Every second counts when trying to prevent eviction, and working through an intermediary may be faster.
Every approved consumer ultimately borrows money from a direct lender. However, you have three paths for arriving at this destination, and the fastest route is best suited to a crisis.
- Contact direct lenders one by one and wait for each to render a decision after logging a hard inquiry to your credit report
- Work through a loan broker with knowledge of direct lenders who specialize in consumers going through hardship
- Submit your credentials to a lead company and have a pool of direct lenders bid for the right to present offers
FAQ About Eviction Prevention Loans
Scan through these answers to frequently asked questions about rental eviction prevention loans before proceeding. Remember, borrow money only as a last resort – when you have sufficient income to repay the lender and the property manager at the same time.