When you rent a new apartment or home, a security deposit is often required to ensure you’ll return the property to the owner or landlord in the condition it was rented. Security deposits are common, but not everyone can afford them. That’s when a security deposit loan may come in handy.
Often equal to the first month’s rent—or sometimes first and last months’ rent—a security deposit helps guarantee a tenant will pay rent and care for an apartment. If a tenant fails to pay rent or damages, the landlord keeps all or part of the security deposit as compensation.
Read on to learn more about your security deposit loan options and determine whether they’re the right choice for you.
Can you use a personal loan to cover a security deposit?
The two main types of personal loans are secured and unsecured. An unsecured loan does not require the borrower to put up collateral (private property, such as a car) for approval. On the other hand, a secured loan is secured by a specific asset in case the borrower defaults.
Generally, borrowers must have good credit to be approved for an unsecured personal loan. Unsecured loans often have higher interest rates than secured personal loans.
You can use a personal loan to cover a security deposit, but it’s essential to understand how these loans work before you explore this option.
Banks, credit unions, and online lenders offer personal loans and approve applicants based on their credit scores and financial history. Lenders tend to offer the lowest interest rates and best terms to applicants who:
- Have high credit scores
- Opt for a shorter repayment period
- Have a history of paying their bills on time
If you don’t have excellent credit, you may be able to take out a secured loan instead. Since these are secured by the collateral you attach to the loan, they often come with lower rates and reduced credit score requirements. Once the lender approves the loan, it disburses the funds, and the borrower can spend the money as they desire, making regular monthly payments.
Should you take out a personal loan for a security deposit?
Security deposits are a typical requirement anytime you’re renting or leasing a property. But if you already have funds tied up in your current property’s security deposit and need to give your new landlord the first month’s rent, you may not have enough cash on hand.
A personal loan can be one option for covering your security deposit, but it isn’t always the wisest financial decision.
Taking out a personal loan for a security deposit could indicate you’re not quite ready to move into a new home or your new property is too expensive for your current budget. Instead, saving up for a few more months or finding a property with a smaller upfront deposit requirement might be the answer, and it would save you from taking out a personal loan.
Pros and cons of a security deposit loan
As with any financial decision, before taking out a personal loan for a security deposit, we advise considering the advantages and disadvantages.
What we like
- A fast personal loan can give you access to the cash you need to secure housing immediately.
- A personal loan may improve the credit score of renters with poor credit if you make on-time payments throughout the repayment process.
Things to keep in mind
- Personal loans charge interest, which means you’ll pay more to borrow the money.
- Going into debt to pay for a security deposit may be a sign you aren’t ready for financial independence. You might consider more affordable rental properties, partnering up with roommates, or living with family until you can save more.
Lenders offering security deposit loans
If you’ve considered the pros and cons and are sure a personal loan is right for your situation, we’ve researched the best security deposit loans for excellent, good, fair, and even thin credit. Read on to find out more about these lenders.
Ensure you only take out what you need to limit the total cost of your loan.
Best for thin credit: Upstart
- Check your rate in 5 minutes without affecting your credit score
- Fully automated loan process
- Innovative eligibility criteria
- No prepayment fees
- No limitations on how you use your funds
- Repay your loan in 36 or 60 months
Sometimes, your issue isn’t that you have a bad credit history—it’s that you don’t have one (or much of one) at all.
For borrowers with a thin credit profile, Upstart may be worth a look. Upstart is an online lending platform that partners with banks to provide personal loans for almost anything. The platform’s lending model considers education, employment, and other variables to determine eligibility, so borrowers with an insufficient credit history can qualify—even if they don’t have a score.
This model leads to 27% more approvals and 16% lower rates than traditional models. Personal loans are available for as little as $1,000; you can get funds as soon as the next business day.
- Soft credit pull to check rates? Yes
- Deposit time: As fast as one business day
- Rates (APR): 6.7% – 35.99%
- Repayment terms: 36 or 60 months
- Origination fee: 9% to 12%
- See if you prequalify now >
Best for fair credit: Upgrade
- Customizable loan options
- Repayment terms from 24 to 84 months
- Borrow $1,000 to $50,000
Upgrade is a terrific option for borrowers with bad or fair credit and those who need smaller loans. Personal loans are available for as little as $1,000, and you can get funds within one business day of approval to lock in your home or apartment with a security deposit when you need it most.
You can check rates with Upgrade without affecting your credit score to ensure you’re satisfied with your loan terms before submitting the final application. Upgrade charges an origination fee of at least 1.85% of the total borrowed amount, but you’ll pay no fees to apply.
- Soft credit pull to check rates? Yes
- Deposit time: As soon as the next day
- Rates (APR): 8.49% – 35.97%
- Repayment terms: 24 – 84 months
- See if you prequalify now >
Best for good credit: SoFi
- Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or other eligible status, be residing in the U.S., and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates reserved for the most creditworthy borrowers. If approved, your actual rate will be within the range of rates at the time of application and will depend on a variety of factors, including term of loan, evaluation of your creditworthiness, income, and other factors. If SoFi is unable to offer you a loan but matches you for a loan with a participating bank, then your rate may be outside the range of rates listed above. Rates and Terms are subject to change at any time without notice. SoFi Personal Loans can be used for any lawful personal, family, or household purposes and may not be used for post-secondary education expenses. Minimum loan amount is $5,000. The average of SoFi Personal Loans funded in 2025 was around $32K. Based on loans funded from 1/1/2025-12/31/2025. Information current as of 10/02/26. SoFi Personal Loans originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org). See SoFi.com/legal for state-specific license details. See SoFi.com/eligibility for details and state restrictions.
- Fixed rates from 6.99% APR to 35.49% APR. APR reflect the 0.25% autopay interest rate discount and a 0.25% member rate discount. SoFi Platform personal loans are made either by SoFi Bank, N.A. or , Cross River Bank, a New Jersey State Chartered Commercial Bank, operating from its Delaware branch, Member FDIC, Equal Housing Lender. SoFi may receive compensation if you take out a loan originated by Cross River Bank. These rate ranges are current as of 10/02/26 and are subject to change without notice. Not all rates and amounts available in all states. See SoFi Personal Loan eligibility details at https://www.sofi.com/eligibilitycriteria/#eligibility-personal. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. Loan amounts range from $5,000– $100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 9.99% of your loan amount for Cross River Bank originated loans which will be deducted from any loan proceeds you receive and for SoFi Bank originated loans have an origination fee of 0%-7%, will be deducted from any loan proceeds you receive.
- Autopay Discount: The SoFi 0.25% autopay interest rate reduction requires you to make monthly payments using SoFi’s automatic monthly deduction from a savings or checking account. The discount will discontinue and be lost when you do not have autopay enabled. You’re not required to set up autopay to obtain this loan.
- Member Rate Discount: To be eligible for an additional 0.25% interest rate reduction on a Personal Loan, you must, within 31 days of loan funding, either (1) meet SoFi Plus eligibility criteria, (2) receive an Eligible Direct Deposit into a SoFi Checking or Savings account, or (3) receive at least $5,000 in Qualifying Deposits into a SoFi Checking or Savings account. You must continue to meet at least one of the above eligibility criteria every 31 days to maintain the discount. See the SoFi Plus terms for details on SoFi Plus subscription. For more details on Eligible Direct Deposit or Qualifying Deposits, please see https://www.sofi.com/legal/banking-rate-sheet. Once you become eligible during the initial period, the discount will be removed or reinstated depending on whether the criteria have been met. Each time your loan is re-amortized, your monthly payment amount will change based upon the interest rate that was in place. SoFi reserves the right to modify or terminate this offer at any time for unenrolled participants. You are not required to meet these criteria to be approved for a loan.
- No fees required
- Apply for a personal loan, check your balance and manage payments in the SoFi app
- Membership benefits include discounts on additional SoFi products and services, and invitations to exclusive events
SoFi is an online lender offering personal loans of $1,000 or more with competitive rates and, in most cases, no fees. Applying online can take less than 60 seconds with no impact on your credit score.
If you qualify, SoFi can be a terrific option for fast cash. The majority of borrowers (86% in 2021) get their loan funds the same day they’re approved. This means you won’t miss out on an in-demand apartment or the perfect house because you don’t have the cash for a security deposit.
- Soft credit pull to check rates? Yes
- Deposit time: As soon as the same day
- Fixed APR: 8.99% – 29.99% with all discounts
- Repayment terms: 24 – 84 months
- See if you prequalify now >
Alternatives to taking out a personal loan for a security deposit
Before taking out a personal loan for your next security deposit, consider the following options instead:
- Use a high-yield savings account to set the money aside over several months. Planning for your next security deposit well in advance can ease the pinch and make saving easier.
- Put your tax refund toward the deposit. If you know you’ll get money back at the end of the tax year, consider planning your move around that refund.
- Use your financial aid refund. If you get money back each semester, save that money for your security deposit. You could even time your move to coincide with your refund disbursement.
- Borrow from a loved one. Rather than pay interest on a security deposit loan, see whether your parents, a sibling, or another trusted loved one will lend you the money. This may be an appealing option if you’re getting a security deposit back from your current home once you move out, so you can repay the debt quickly.
About our contributors
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Written by Stephanie ColestockStephanie is an experienced personal finance writer with more than a decade of experience as a freelancer.
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Edited by Amanda HankelAmanda Hankel is a managing editor at LendEDU. She has more than seven years of experience covering various finance-related topics and has worked for more than 15 years overall in writing, editing, and publishing.