September 11, 2023

How Does Student Debt Affect Rental Applications

Having student loans is a reality that many students face in the United States. If you are pursuing educational advancement, it is likely that you will incur student loans unless you are an heir to a sizable fortune or a proprietor of a successful business. 

If you are carrying student debts and want to rent a property, you might ask whether your financial situation would affect your rental application. The aim of this blog post is to answer that question. 

Is it Possible to Rent a Property While Having Student Loans?

Yes, it is possible. Rental property owners typically care about whether you have the means to pay rent or not. Also, they need assurance that tenants will maintain the property in good condition. It is crucial to convince your landlord of these two things. 

However, there is another element that landlords look for in a rental applicant: the credit score. Credit scores serve as a standard used by landlords to determine your ability to pay rent because your credit score shows how well you manage your finances. 

Many students who have student loans are suffering from low credit scores, particularly if they are paying them late or defaulting on them. Since a credit score is a vital piece of information that helps lenders in screening tenants, having student debt problems can affect your rental application. 

It can be challenging for you to look for a property to rent if you have a poor credit score as a result of your student loans. Housing providers want tenants who have fewer financial risks. Your low credit score is a liability to a landlord and can be a ground to reject your rental application. 

How Student Debts Affect Credit Scores

Your credit report will reflect whether you are paying your student loan on time or not. When applying to rent a property, the housing provider will request a copy of your credit report. 

This information is vital for a landlord to determine your financial stability. Your credit report shows your credit score and balance, and from such crucial information, your landlord gauges whether you will be a good tenant. 

Your credit report is a non-issue if you are paying your student loans and other debts timely and consistent. The landlord will consider you good at managing your finances in this case. The better you are at handling your finances, the more your credit score will increase. 

Tips When Renting a Property While Having Student Loans

Do not be hopeless when you are carrying student loans while looking for a rental property. Follow these tips when you are in this situation. 

Pay Off Your Student Loans

One smart move you can make when you want to rent a home while having student loan problems is to pay off your debts first. Unburden yourself of your student debts to increase your chances of getting your rental application approved. 

Once you get rid of your student loans, you will see an improvement in your credit score. As such, you can secure a rental property without a hassle. 

Find a Co-Signer

One of the solutions to your problem is having a co-signer to increase the chances of getting your rental application approved. You must choose a person who is financially stable and reliable to be your co-signer. You can pick someone who is close to you, such as a friend or a family member. 

A co-signer will make a promise on the rental agreement that he will be your substitute for paying the rent if you fail to do so. Such an arrangement will give the rental owner some assurance, regardless of your financial situation of having student loans. 

While having a co-signer is a smart idea to make the landlord lease you the property, you must take note that finding one is not that easy. As being a co-signer is making yourself obligated to a rental agreement, it is challenging to convince someone to be one. 

Ask for a Recommendation from Your Previous Landlord

If you have a previous rental agreement with a landlord, you can ask that former landlord to write a recommendation for you. This is assuming you have a good business relationship with your previous landlord. 

Once you can get a recommendation from your former landlord, you show it to your potential landlord. The recommendation can make it possible for you to rent a property even if you are having student loan problems. 

Final Thoughts

Now you know how student loans can affect your rental application. Landlords will always look for a tenant who has less financial risk, and having student debts might make it challenging for you to rent a property. Fortunately, there are remedies that can make a potential landlord accept your rental application. Examples are paying off your student loans, finding a co-signer, and getting a recommendation from your previous landlord.