BNPL Pushes Into Rental Space as Housing Costs Climb

Housing pressures are reportedly leading more companies to offer “rent now, pay later” loans.

That’s according to a report Tuesday (June 9) from the Financial Times (FT), which cites the example of this year’s partnership with buy now, pay later (BNPL) lender Affirm and the FinTech Esusu to offer “rent-split” loans.

Three other companies that offer these housing loans told the FT that their client bases were rapidly growing. These lenders cover a tenant’s payments to their landlord, and accept the money back in installments, essentially splitting the renter’s housing payment into smaller sums.

Wemimo Abbey, co-founder of Esusu, said in an interview with the FT that the loans serve an increasing number of people with freelance or gig economy jobs and irregular pay schedules.

“People can make [rent payments], it’s just the timing,” said Abbey, whose company teamed with Affirm in January.

“Recent inflation has been really sticky, but incomes are not going up,” Abbey added. “So that’s what makes us think this is going to be a massive, massive market.”

Another rent-split lender, Flex, told the FT that it has processed $37 billion in rent payments since launching in 2019.

The FT notes that while the U.S. is in the middle of a housing crisis, lower-income renters suffer the most. Of rents making under $30,000 per year, 83% spent more than 30% on rent and utilities in 2024, according to a study by the Harvard University Joint Center for Housing Studies. The U.S. government considers families that spend more than 30% of their income on housing to be cost burdened, the report added.

“Rent is traditionally due at the start of the month. Paychecks may not match up with that fixed schedule,” PYMNTS wrote earlier this year. “The mismatch matters, particularly for the roughly two-thirds of U.S. consumers who live paycheck to paycheck.”

In a column at the start of the year, PYMNTS CEO Karen Webster wrote that timing, not total income, is what often cripples household budgets, as bills land on fixed dates and don’t always line up with earnings.

In the past, households closed that gap with overdrafts, late fees or revolving card balances. Then came the advent of BNPL.

“Rather than penalizing consumers after they fall short, installment products set repayment terms in advance, offering predictability through fixed amounts and defined end dates,” the report said. “BNPL has moved from checkout feature to everyday working capital, increasingly used for essentials such as utilities, groceries and now housing.”