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

Renters are increasingly turning to “rent now, pay later” apps to smooth out cash flow, but the way these services charge fees can make them function like very expensive short‑term loans and raise serious affordability concerns.

How these services work

• Companies such as Flex, Livble and newer pilots from firms like Affirm pay the full rent to the landlord when it is due, then collect two or more installments from the renter over the month.

• The pitch is that splitting a large, fixed expense into smaller payments helps renters align rent with paychecks and avoid late fees or overdrafts.

Fees and effective cost

• Flex, one of the largest providers, typically charges a flat monthly subscription plus a fee based on a percentage of rent; one user paying 1,850 dollars in rent was charged 14.99 dollars plus 1 percent of rent, or about 33 dollars per month.​

• For that user, the structure translated into paying 33.49 dollars to borrow 500 dollars for two weeks, which works out to an effective annual percentage rate of about 172 percent when expressed using standard consumer‑lending calculations.​

• Livble does not use subscriptions but charges 30 to 40 dollars per month depending on how long part of the rent is deferred; those fees can equate to effective annual percentage rates in the roughly 104 to 139 percent range.​

Why advocates are worried

• Consumer advocates argue these products are essentially high‑cost, short‑term credit, but they are often marketed as budgeting tools or “flexible rent” rather than as loans with a clear APR.​

• The fees add to already high housing costs and can trap renters in a cycle where each month’s rent depends on borrowing against the next month’s income.

• Some services are tied to large property‑tech firms; for example, Livble is owned by RealPage, which recently settled allegations that its rent‑pricing algorithm helped landlords coordinate to push rents higher, heightening fears that new payment tech could also influence rent levels.​

Comparison to other payment options

• Paying rent with a credit card can also be costly because landlords often pass along processing fees of about 2.5 to 3.5 percent of rent, which on 1,500 dollars in monthly rent means roughly 37.50 to 52.50 dollars in fees, an amount comparable to many rent‑now‑pay‑later charges.​

• Rewards programs such as Bilt focus on earning points for paying rent rather than splitting payments, but tenants may still face card or processing costs depending on how the payment is routed.

Regulatory and market context

• These offerings are emerging alongside broader “buy now, pay later” regulation, where federal agencies initially moved to treat BNPL like credit cards under the Truth in Lending Act but have since signaled plans to withdraw that interpretive approach, creating uncertainty about how strongly such products will be overseen.

• Economists and tenant advocates caution that flexible‑payment tools do not solve the underlying problem of high rents and, if widely adopted, could even encourage landlords to adjust pricing based on renters’ apparent ability to stretch payments rather than on local market fundamentals.