Report Exposes 'Rent Now, Pay Later' Loans Trapping Struggling Americans

Predatory lenders target renters with hidden fees and deceptive practices, pushing people further into debt

Published on Feb. 25, 2026

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A new investigative report, 'RENT NOW, PAIN LATER: How 'Rent Now, Pay Later Loans' Put Working People at Risk', reveals how predatory lenders are pushing loan products that involve hidden high costs, misleading claims, and deceptive practices that take advantage of Americans struggling with high rents. These 'rent now, pay later' loans are designed to extract additional fees every month and heighten the risk of eviction for the 109 million renters in the U.S.

Why it matters

As America's affordability crisis worsens, with rents tripling on average since 1990 and over half of renter households spending more than 30% of their income on housing, these predatory 'rent now, pay later' loans are further exacerbating the financial strain on working families. The report calls for urgent action by federal, state, and local officials to investigate and prosecute these lenders, as well as enact policies to protect consumers from these abusive practices.

The details

The report found that these 'rent now, pay later' lenders typically partner with banks through 'rent-a-bank' agreements to evade state consumer protection laws. They then charge 'membership' fees that disguise high interest rates of up to 180% APR. Many borrowers find the lenders fail to deliver advertised services or support, leaving them facing imminent eviction. The report recommends that law enforcement investigate and prosecute these firms, that regulators supervise banks engaged in this lending, and that lawmakers ban corporate landlords from embedding these products on rent payment platforms.

  • The report, 'RENT NOW, PAIN LATER: How 'Rent Now, Pay Later Loans' Put Working People at Risk', was published on February 25, 2026.

The players

Towards Justice

A nonprofit organization working to achieve economic justice in the workplace and the coauthor of the 'RENT NOW, PAIN LATER' report.

David Seligman

The executive director of Towards Justice and a coauthor of the 'RENT NOW, PAIN LATER' report.

Ben Kaufman

A senior fellow with Protect Borrowers (formerly known as the Student Borrower Protection Center) and a coauthor of the 'RENT NOW, PAIN LATER' report.

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What they’re saying

“These shady financial products—designed to take advantage of desperate renters—appear to involve all kinds of potential lawlessness. Any true affordability agenda must involve taking on the predatory cottage industry sprouting up around our rental market.”

— David Seligman, Executive Director, Towards Justice (thewestsidegazette.com)

“With political leadership at the federal level sabotaging consumer protection, it's critical that state and local lawmakers, policymakers, and law enforcement take action to safeguard Americans from being pushed deeper into debt just from paying their rent.”

— Ben Kaufman, Senior Fellow, Protect Borrowers (thewestsidegazette.com)

What’s next

The report recommends that federal, state, and local law enforcement officials investigate and prosecute 'Rent Now, Pay Later' firms for violating consumer protection laws. It also calls for prudential regulators to supervise and enforce banking laws against banks engaged in this type of lending, and for states and the federal government to enact legislation banning corporate landlords from offering or embedding these predatory loan products.

The takeaway

This report shines a light on a growing predatory lending industry that is exploiting vulnerable renters struggling with skyrocketing housing costs. Urgent action is needed at all levels of government to crack down on these deceptive and abusive 'rent now, pay later' loans that are pushing working families deeper into debt and housing insecurity.