Renters use ‘rent now, pay later’ services to manage monthly payments, but fees raise concerns

By KEN SWEET and CORA LEWIS

Updated 10:12 AM EST, February 4, 2026

NEW YORK (AP) — Rent can eat up an entire paycheck at the start of the month, so a growing number of renters are turning to a financial product that promises relief by letting them split the bill — for a price.

So-called “rent now, pay later” services have emerged over the past few years as housing costs climb and paychecks grow less predictable, particularly for lower-income and gig-economy workers. According to the Bureau of Labor Statistics, rents have jumped nearly 28% in past five years.

Companies such as Flex, Livble and, more recently, Affirm, say breaking rent into multiple payments can help renters manage cash flow. But consumer advocates warn the products typically function like short-term loans, layering fees onto already strained budgets and, in some cases, carrying triple-digit effective interest rates — raising questions about whether they ease financial pressure or deepen it.

Kellen Johnson, 44, started using Flex to split up his rent payments about two years ago. Instead of paying the whole $1,850 of his rent on the first of the month, Johnson would pay $1,350 on that date, and $500 on the 15th. For the service, Flex collected a $14.99 monthly subscription fee, as well as 1% of the total rent, which for Johnson was $18.50, bringing his monthly charges for the app to more than $33.

Johnson said he was willing to pay the extra costs in part because he worked as an independently contracted delivery person for Amazon at the time, and his paychecks could vary.

“It was an expense that I was incurring, but I went ahead as it was more convenient,” said Johnson, who now works as a driver for senior citizens in Sacramento, California.

Roughly 109 million Americans, or about 42.5 million households, are renters in the United States. The Census Bureau estimated in 2024 that a large share of those households pay 30% or more of their monthly income on rent. The bureau considers such households to be “cost burdened,” meaning rent consumes so much of their income that they have less ability to plan for future expenses or build wealth.

Rent now, pay later services generally operate the same way: The company pays the landlord the full rent when due, and the renter repays the company in two or more installments over the course of the month. Because rent can be such a large expense, the companies argue that spreading payments out can give renters more cash on hand.

Many of these services come with fees. The fees can be structured differently but should be generally thought of as cost of credit, consumer advocates warn. In Johnson’s case, he was paying $33.49 for a two-week loan of $500, for an effective annual percentage rate of 172%, when expressed using standard consumer-lending calculations.

“Renters should be skeptical of any financing providers that have partnered with a landlord and be skeptical of anything that sells itself as no fees or no interest,” said Mike Pierce, executive director of Protect Borrowers. Pierce previously worked at the Consumer Financial Protection Bureau and co-authored a report that was released this week on the industry.

Launched in 2019, Flex is one of the largest companies focused on splitting rent payments. The company says its 1.5 million customers now send about $2 billion a month in rent through its system, and several of the country’s largest landlords accept Flex as a payment option.

Flex says most of its customers are lower-income renters with weaker credit profiles. The company reports a median credit score of 604 among its users and says about one in three customers works more than one job to make ends meet. A Flex spokesman says the average customer uses the service three to four times a year. Johnson used it every month.

Livble does not charge a subscription, but charges renters a fee ranging from $30 to $40, according to the company’s help page. Depending on how long the renter defers part of the payment, Livble’s fees can translate into effective annual percentage rates of roughly 104% to 139%.

The buy now, pay later company Affirm said this month that it is piloting a program allowing some customers to split rent into two payments. The program is being tested in partnership with Esusu, a company that reports rent payments to credit bureaus to help consumers build credit. An Affirm spokesman said the company is not charging renters interest or fees to use the product, but may charge landlords fees

As another financing option, landlords are increasingly accepting credit cards for rent payments. Bilt, a credit card startup, built its brand around targeting renters when it launched, and some tenants also use credit cards to accumulate rewards or points.

But paying rent by credit card can also be costly. Landlords typically pass the processing fees on to tenants. Depending on the card issuer and payment network, these fees can range from about 2.5% to 3.5% of the rent. For a renter paying $1,500 a month, that translates to roughly $37.50 to $52.50 in fees — a monthly cost comparable to what services like Livble and Flex charge.

Economists and renters’ advocates argue that none of these financing options address the fundamental issue of affordability in the rental market. If credit cards, or flexible rent payment options become more widely used, they worry rents could rise further as landlords start factoring in a potential renters’ weekly cash flow as opposed to the rental market in the area the building is located in.

Merchants already pass along credit card processing costs to customers in the form of higher prices, and advocates worry that the rental market could adopt similar patterns. For example, Livble is owned by RealPage, which last year settled allegations that its algorithm allowed landlords to collude and push rents higher.

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Economics Writer Christopher Rugaber contributed from Washington.

In my town they ran the payday loan company out of town. Now it looks like they and companies like them have just gone online.

"Companies such as Flex, Livble and, more recently, Affirm, say breaking rent into multiple payments can help renters manage cash flow."

Marketing at its finest.

"In Johnson’s case, he was paying $33.49 for a two-week loan of $500, for an effective annual percentage rate of 172%,....."?

Is that right?

" An Affirm spokesman said the company is not charging renters interest or fees to use the product, but may charge landlords fees..."

Isn't this the one GKARL mentioned?

Won't LL's just up the rent?

"As another financing option, landlords are increasingly accepting credit cards for rent payments."

Oh, that should help them. Not.

"Livble is owned by RealPage,///"

No Surprise.

"have any of these people figured out all they have to do is get themselves one month ahead and all bills will be paid on time? is it really that hard?"

It seems to be for most.

Anything like this only teaches people bad money habits and just kicks the can down the road. Why do some insist on teaching people bad money habits and then complaining about how bad the prospects credit is? Let me answer that for you. The are greedy and want to line their pockets more. They don't really want to help anyone but rather increase their profits. Of course, they have to tell people they are helping them to hide the truth and try and clear their conscious. Otherwise, it wouldn't be marketing at its finest.

It's a crazy world out there, used to be the buy now pay later was reserved for buying houses and cars. Anymore, you can buy toilet paper on Amazon and pay later in 4 easy payments, with interest or fees of course.

Broke people remain broke because they don't plan for the future and live below their means.

I have a few people on the payday plan.

But I do not charge them a fee for doing this. Sure I get an extra month a year in rents, but I tell them that upfront.

I know I am leaving money on the table but I fear that a business built on all the extra fees is one that will be scrutinized.

Meanwhile, we have people on SNAP benefits that could easily work complaining about the 20 hour a WEEK work requirement.