Renters Use ‘Rent Now, Pay Later’ Services to Manage Monthly Payments, but Fees Raise Concerns

A growing number of U.S. renters are turning to "rent now, pay later" services like Flex, Livble and Affirm to spread out monthly rent payments, but mounting fees and high effective interest rates have raised alarms among consumer advocates who warn the products may worsen financial strain for already cost‑burdened households.

By Sarah Mitchell – Senior News Correspondent

Last Updated: Feb. 5, 2026

How ‘Rent Now, Pay Later’ Works

So‑called “rent now, pay later” services allow renters to split their monthly rent into two or more payments rather than paying a large lump sum at the start of the month. Under this arrangement, a third‑party company pays the full rent to the landlord on time, and the renter repays the company over weeks. Advocates of these services say they can ease cash‑flow challenges for renters with variable incomes or unpredictable pay schedules, particularly gig‑economy workers and those with limited savings. :contentReference[oaicite:1]{index=1}

Fees and Costs Can Be Significant

Although touted as a flexible payment tool, the services often include fees that consumer advocates say make them akin to short‑term loans. For example, one renter paid more than $33 a month in subscription and service fees for a two‑week split on a $1,850 rent payment — translating to an effective annual percentage rate of 172% when calculated using standard lending formulas. Critics warn that these costs, layered on top of already stretched budgets, can deepen financial stress instead of alleviating it. :contentReference[oaicite:2]{index=2}

Varied Fee Structures Among Providers

Different companies structure their fees in varied ways. Flex charges a monthly subscription plus a percentage of the rent, while Livble typically charges a flat fee that can amount to a high effective annual rate. Buy‑now‑pay‑later firm Affirm is piloting a rent‑splitting option without direct renter fees, but access depends on subscribing to additional services that carry their own monthly costs. These discrepancies make it harder for consumers to compare true costs across platforms. :contentReference[oaicite:3]{index=3}

Alternative Payment Methods Also Carry Costs

Some renters turn to credit cards to pay rent in order to earn rewards or build credit, but this approach often comes with processing fees passed on by landlords — typically 2.5% to 3.5% of the rent amount. For a $1,500 rent, that could add roughly $37.50 to $52.50 in costs, roughly comparable to fees from dedicated rent‑splitting services. These alternatives highlight how many payment options feature hidden charges that may strain household finances. :contentReference[oaicite:4]{index=4}

Underlying Housing Affordability Challenges

Economists and renters’ advocates argue that these financing workarounds do not address the fundamental problem of unaffordable housing. With rents having climbed sharply over recent years and many households spending 30% or more of their income on rent, reliance on credit‑style products could become commonplace even as they erode financial stability. Some worry landlords may factor flexible payment options into future pricing, further inflating costs for tenants. :contentReference[oaicite:5]{index=5}