Fintechs Expand Rent-Split Loans as 83% of Lowest-Income US Renters Face Housing Strain
Updated
Updated · Financial Times · Jun 9
Fintechs Expand Rent-Split Loans as 83% of Lowest-Income US Renters Face Housing Strain
2 articles · Updated · Financial Times · Jun 9
Summary
Affirm has teamed with Esusu to pilot rent-split loans, joining other fintechs that say demand is rising as more Americans struggle to cover monthly housing costs.
These products pay landlords upfront and collect from tenants in installments through the month, targeting workers with irregular pay and renters living paycheck to paycheck.
Flex said it has processed $37 billion in rent payments since 2019; its average customer has a 602 credit score, and nearly 53% of surveyed users would have less than three weeks of emergency savings after losing income.
Housing stress is widening: 83% of renters earning under $30,000 spent more than 30% of income on rent and utilities in 2024, while the typical first-time homebuyer age has climbed to 40.
Consumer advocates warn hidden fees and high interest can deepen debt, even as lenders argue the loans are a cheaper alternative to late-rent penalties, overdrafts, payday loans and subprime cards.
Are 'rent now, pay later' services a lifeline for tenants or a high-tech debt trap masking the housing crisis?
Can new rent-reporting tools truly help millions become 'credit visible,' or do they introduce unforeseen financial risks?
If paying rent in installments becomes the norm, could it unintentionally encourage landlords to increase overall rental prices?
The U.S. Rental Affordability Crisis: Why 50% of Renters Are Cost-Burdened and the Double-Edged Sword of Fintech Rent-Split Loans
Overview
The United States is facing a severe rental affordability crisis, with rent taking up a growing share of household incomes and making housing increasingly out of reach for many people. This problem affects individuals and families across all income levels, but low-income tenants are hit the hardest, especially as investors target workforce housing. As a result, existing inequalities are getting worse and vulnerable groups are pushed further into financial trouble. The crisis is especially intense in certain regions, like the Sunbelt, even though new apartment supply and slight rent decreases have appeared in some areas. Overall, the shortage of affordable rental housing continues to drive these challenges.