How to Pay Rent When You Can’t Afford It

Mar 9, 2022


After Megan Pearson’s position as a server in a restaurant had been put in limbo due to COVID-19 related stay-at-home order, the unemployed mother had to figure out a way to pay for her rent in Brooklyn, New York.

“I wrote about my frustrations on Facebook is trying to negotiate unemployment for the beginning of the week,” Pearson says. “I likely made around 200 phone calls before finally settling everything. “

Uncertain of whether help would be available on time or in any way, Pearson took action, hesitantly, establishing a crowdfunding account on the advice of a person who’d seen her post on social media. The move saved Pearson some time and eventually allowed her to remain in her home without incurring many loans.

If you also, are facing the stress of a crisis and are struggling to pay rent, think about some of the steps below before deciding on high-interest loans.


Find free alternatives first.

Some states have imposed an eviction moratorium during the COVID-19 disaster. However, you’re still accountable for paying rent. The initial step should be to review your spending plan and “find” the money you can.

Cut down on unnecessary costs, cut down on 401(k) contributions, Contact lenders for assistance, search for low-income aid for utilities and food, and advise Jeffrey Arevalo, a financial wellness specialist with GreenPath. This organization is a non-profit credit counseling company.

Here are a few options that are free or near it:

  • Utilize the help you receive. Making an application for unemployment and other aid programs might be time-consuming, but it’s sure worthwhile. Pearson believes she will cover the future rent payment with the money from unemployment and coronavirus stimulus funds.
  • Speak to your landlord. Tell them about your situation and request to be given more time until payment is received. You can also ask for payment in installments or waive late fees. The landlord may be willing to aid if you’ve got a timely payment history. “It’s worth a try,” says Arevalo, who says he’s been working with clients who’ve been successful with this method. Whatever terms you negotiate and agree upon, make them legally binding.
  • Contact the 211 number. Local non-profits and religious groups might offer assistance in renting. United Way helps access those services by dialing the 211 number. However, be aware that resources might be limited during national emergencies.
  • Associations are collecting money to assist people who are losing jobs in their industries because of COVID-19. You can apply for grants in your field. Pearson requested an award to the Restaurant Strong Fund, which helps restaurant workers affected by COVID-19 closings. However, she’s not yet heard from the fund.
  • Get help from friends or family members. Your loved ones and people who have steady incomes, in general, could be willing to assist. Pearson has raised $3,995 for the cost of rent and other essential expenses through GoFundMe. GoFundMe crowdfunding platform. “If you don’t inquire for help, nobody will know that you’ll need it,” Pearson says. If you’re uncomfortable with crowdfunding, you can request family members to provide loans.
  • Change your living arrangements. Think about subletting your home or the room if your lease permits it. Or move in with a friend or loved one and support each other by sharing rent costs. Moving may be costly. If you agree, you’ll need to consider the financial impact of ending the lease. Talk to your landlord to find out what is negotiated.
  • GreenPath Financial Wellness is offering free financial counseling over the phone during the outbreak. Consult a professional for advice. A credit advisor can look over your financials to find savings on rental.

Lean on investments


In general, it’s not recommended to take money intended to be used for the future, but this isn’t the norm. If an emergency is threatening to remove you from your home — now and right now, the current”normal “rules” do not always apply.

If you own a tax-deductible brokerage account, it is possible to think about selling your stocks. If you don’t, your next possibility is to take a cash withdrawal from your 401(k) or personal retirement account, according to Andrew Rosen, financial advisor and partner of Diversified Financial Planning firm. Also, taking advantage of your retirement account isn’t a good idea; however, in the event of a crisis, it could be necessary, or you may be able to minimize the financial impact.

According to the Coronavirus Aid, Relief and Economic Security Act, individuals under 60 1/2 years who are financially or physically affected by COVID-19 can withdraw up to $100,000 from the qualified 401(k) or IRA until December. 31st, 2020, without paying the standard 10% earlier withdrawal fee. The tax burden is spread out over three years, and you can get a tax refund when you repay it before the end of the year. When you lose your job, transfer the funds from your 401(k) to the IRA and then make a withdrawal, Rosen suggests.

CARES Act also lets qualifying 401(k) plan participants borrow the entirety of their remaining vested balance, up to $100,000 for loans. It is also possible to borrow up to $100,000. In the event of an emergency not related to COVID-19, borrowing to the 401(k) (or similar plan) provided your employer provides it is a way to avoid tax penalties, penalties, and credit checks.

But, you should think carefully before making this decision. If you’re genuinely struggling with debt and renting is just one of the financial obligations you cannot pay, you may be thinking about alternative options.


“Most people aren’t aware that, in general, your retirement savings are secured in bankruptcy,” Rosen says.

Select the cheapest high-interest debt

You can borrow money to pay rent through, for instance, applying for an interest-free credit card. However, if you don’t have enough income or credit (typically having a FICO score of at minimum 690), You may have to choose between credit with high interest. Take a look at the following, starting from the least expensive to the most costly:

  • You can borrow against your credit card’s limits. Specific offers like Citi Flex Loan or My Chase Loan let you take out a loan against your credit card’s limit, with a fixed interest rate and a fixed term. The loan money is transferred to the bank account without a credit check or origination charge.
  • Pay rent using or credit card. Certain companies allow rent payments using credit cards, but at an amount. Plastiq, for instance, will enable you to charge your rent to your credit card and will then issue your landlord a check on your behalf in exchange for the 2.85 processing fee of 1. Be aware of that cost before deciding to go this route. Remember that if you cannot pay it back entirely within a given billing cycle, you’ll accrue interest on your rent payment according to the APR that your credit card charges.
  • As a last resort to consider, you could consider a cash advance. A cash advance could provide fast cash up to your limit. However, you’ll pay a significant price through the cost of the loan and a rate of interest that begins accruing as soon as you withdraw the money from your bank account or ATM. Cash advances can also affect your credit score by increasing your credit utilization, which is a crucial aspect of credit scores. It’s still a possibility if you need one, and it’s probably less expensive than payday loans, however, which isn’t an option if you’re not receiving an income.