Rising housing costs and uneven income are reshaping how Americans pay their rent. A growing number of renters are turning to rent now pay later services, products that allow monthly rent to be split into multiple payments, usually in exchange for fees. Supporters say the option offers flexibility at a time when cash flow is tight. Critics argue it is another form of high cost credit layered onto an already expensive housing market.
According to the Bureau of Labor Statistics, rents have climbed nearly 28 percent over the past five years. That increase has outpaced wage growth for many workers, especially those in lower paying or contract based jobs. As a result, rent often consumes a large share of monthly income at the very moment bills are due.
When rent hits all at once
Rent is typically the largest monthly expense for households, and it is usually due in full at the start of the month. For renters living paycheck to paycheck, that timing can be destabilizing. Rent now pay later companies position themselves as a solution by spreading the cost over two or more installments.
The model is straightforward. The service pays the landlord the full rent on time. The renter then repays the service over the course of the month. Companies say this structure helps renters avoid overdrafts, late fees, or missed payments when income arrives unevenly.
But the convenience comes at a price. Many of these products charge subscription fees, transaction fees, or both. Consumer advocates caution that these charges effectively function as interest, even when they are not labeled that way.
A closer look at the fees
Consider a renter paying $1,850 a month. By splitting the payment, they may defer a few hundred dollars for two weeks, but they could also incur $30 or more in monthly charges. When calculated using standard lending formulas, that short term advance can translate into triple digit annualized rates.
Mike Pierce, executive director of Protect Borrowers and a former official at the Consumer Financial Protection Bureau, warns renters to be cautious. He says financing tied directly to landlords can limit consumer choice and obscure the true cost of credit, particularly when companies advertise no interest or low fees.
Who is using these services
Roughly 109 million Americans live in renter households, according to the U.S. Census Bureau. In 2024, the agency estimated that a significant share of those households spent 30 percent or more of their income on rent, a threshold considered cost burdened.
One of the largest players in this space is Flex, which launched in 2019. The company says it processes about $2 billion in rent payments each month for roughly 1.5 million customers. Flex reports that many of its users have lower credit scores and work multiple jobs, making predictable monthly payments difficult.
Another provider, Livble, charges renters a flat fee per transaction rather than a subscription. Depending on the timing of the deferred payment, those fees can also translate into high effective borrowing costs.
Big fintech moves in
The trend has attracted attention from larger financial technology firms. This year, Affirm began piloting a rent payment program in partnership with Esusu, a company that reports rent payments to credit bureaus. Affirm says renters are not charged interest or fees, though landlords may pay to participate.
At the same time, more landlords are accepting credit cards for rent. While this can help renters earn rewards or manage cash flow, card processing fees of 2.5 to 3.5 percent are often passed along to tenants, adding tens of dollars to monthly housing costs.
Does flexibility mask a bigger problem?
Economists and housing advocates argue that these financial products do not address the core issue of affordability. Instead, they may normalize higher rents by shifting focus from total cost to payment timing.
There is also concern that widespread use of rent financing could influence pricing behavior. In other sectors, merchants often pass credit card fees along to consumers through higher prices. Critics worry the rental market could follow a similar path.
These concerns are heightened by the role of large property management technology firms. Livble is owned by RealPage, which has faced scrutiny over allegations that its pricing tools contributed to higher rents, claims the company has denied.
For now, rent now pay later remains a niche but growing option. As housing costs continue to rise, the debate over whether these services provide relief or deepen financial strain is likely to intensify.
