Startups Are the New Housing Lenders
A new brand of startup wants to help you pay your rent, Realtor.com reports.
These companies, which also include Domuso and Till, are entering a market long associated with payday lenders. Compared with cash-advance loans, which come with annual interest rates as high as 700% in some states, funds from the rent-lending startups are available at much lower cost. Some are competitive with credit-card borrowing rates at less than 20%.
That is a big help for those who rely on irregular paychecks or can’t come up with large move-in deposits.
The pitfall to such credit is that the loans might encourage some young renters to live beyond their means. Large cities often have a high cost of living that can push residents ever deeper into long-term debt and strain their credit scores.