If you’re renting, you may assume getting a loan is harder. There may be certain loans you wouldn’t be eligible for (like homeowner loans and some other forms of secured borrowing), but this doesn’t mean you don’t have plenty of options.
We explain what’s out there for renters, as well as ways to improve your chances of being accepted.
When you rent your home, you can't get loans that homeowners get. But don't worry! You can still borrow money through personal loans. These loans don't need you to provide an asset in order to get them.
Each lender will have their own criteria, but generally speaking, you must:
Yes, but it’s not the best idea. Using loans for regular expenses like rent creates a dangerous cycle that's hard to escape. When you borrow for rent, you're not just paying back what you borrowed — you're also paying interest, which means next month you'll have even less money available.
If you're struggling with rent, talking to your landlord about payment plans, or seeking assistance programs are smarter moves that won't leave you in debt.
Look around before you choose! Compare different loans to find the best deal for your circumstances.
Remember, lenders will look at:
These things decide how much you can borrow as well as how much extra you'll pay back, e.g. the interest rate you’re charged.
It's important you only borrow money you can afford to pay back. Try this:
If it's not enough, borrowing money may not be the best solution right now.
Lenders want to know if you pay your bills on time. To do this, they’ll check your credit history to see how you’ve managed money in the past. If you haven’t paid back previous credit in full and on time, it’s recorded on your credit report and you might have trouble accessing future credit.
Lenders tend to pay more attention to your credit rating when you’re applying for a personal loan (as opposed to a secured loan). For this reason, it’s a good idea to make sure everything is up to date and accurate. You can do this by checking your credit report through services like CredAbility.
If your credit score is lower than you’d like, you may want to work on improving your rating before you apply for a loan. Some steps you can take to do this include:
If you've never borrowed money before, lenders may find it hard to know how likely you are to pay any back. But you pay your rent on time, right? That should count!
Experian (one of the main credit agencies in the UK) agrees. They created ‘The Rental Exchange’ with Big Issue Invest.
This system allows lenders to see that you pay your rent on time, just like homeowners who pay their mortgages.
If you rent from the council or social housing, your landlord can tell The Rental Exchange about your on-time payments.
If you rent from a private landlord who owns lots of homes, they might do this too. If not, you can sign up with Credit Ladder to show your payments.
When you pay your rent on time every month, your credit history gets better! Remember, this works both ways, so missing payments can have a negative effect on your credit history.
If a loan doesn't feel right, you could try:
Disclaimer: We make every effort to ensure content is correct when published. Information on this website doesn't constitute financial advice, and we aren't responsible for the content of any external sites.
Zubin is a personal finance writer with an extensive background in the finance sector, working across management and operational roles. He applies his experience in customer communication to his writing, with the aim of simplifying content to help people better understand their finances.
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