The news: Affirm will offer installment loans for rent payments through a partnership with Esusu, per Payments Dive.

Tenants can access an interest-free loans repaid in two biweekly installments. 

Affirm users will not be able to access interest bearing loans or pay-in-four installments for rent. 

Affirm joins Zip as the second buy now, pay later (BNPL) firm to provide installment loans for rental payments.

Why this matters: BNPL providers are breaking into more sectors to expand their reach. Moving into housing could help Affirm lock up volume from most consumers’ most expensive monthly payment: rent. 

Partnerships hinging on industries with large payment volume—think home and auto repairs—contribute to BNPL’s rising payment spending per user, which we anticipate to hit $1,366.28 this year, per our forecast.

Potential snags: BNPL players like Affirm claim that their products give consumers freedom from revolving debt. 

However, for renters needing to access installment loans to finance a monthly rent payment over two parts, the likelihood that they’ll be able to continuously juggle former rent loan obligations against the next month’s upcoming rent without taking out more installment loans is slim. In this way, Affirm and Zip risk recreating the environment of revolving debt but with recurring loans.   

Implications for lenders: The renting class is becoming bifurcated into those trying to gamify their rent payments for survival or for rewards. 

• Opting for installment loans could signal deep distress on a consumer’s part to maintain current payments. 
• On the other hand, more financially stable consumers are turning to cards like Bilt or Made to juice as much rewards out of their rent or mortgage payments. 

Offering financial products that help both consumers hit their financial goals of surviving or thriving will be key to securing long-term loyalty.