Loan for rent deposit – what to consider?

Before considering a loan for a rental deposit, basic information about the rental deposit should be used. The deposit represents a security deposit for the landlord if the tenant does not adhere to agreements that are set out in the rental agreement. This includes outstanding rental payments or damage to the rental property, which the landlord can compensate with this advance payment.

The rental deposit is earmarked

The rental deposit is earmarked

There are legal regulations for the amount of the deposit. It is limited to a maximum of three months’ rent, which means the price of the basic rent, excluding operating costs and heating. Instead of a cash payment, we recommend handing over a savings book with the appropriate deposit. In the case of long-term rental, this can at least result in a small plus through interest if the savings book is normally returned after the tenancy has ended and acceptance by the landlord and tenant.

Three months’ rent can correspond to a sum that cannot be withdrawn from the normal household budget. The selected property, however, corresponds entirely to the wishes and the rent would be quite affordable.

Plan B comes before the loan

Plan B comes before the loan

A loan for the rental deposit should always be your last choice. If this is necessary, it is at least clear that the rental deposit represents an extraordinary burden, which should be avoided if possible. What are the alternatives?

A reputable landlord is interested in a reputable tenant, so the contract is not a one-sided wish. If you don’t have large sums in your postage account, you can still have a regular income and treat the rental property with care, which is in the interest of the landlord.

Present these advantages openly and offer a bank guarantee. The deposit is a security and the landlord also has it through their bank. Perhaps the provision of the money is not entirely impossible, just an ad hoc problem as a total. In that case, the landlord can also be offered payment in installments. Speak directly that a loan for the rental deposit would be an uncomfortable burden and limit your quality of life, whereas paying in installments over three months is a viable option that does not harm the landlord.

You pay the first installment at the beginning of the tenancy, the next installments on a monthly basis and have it confirmed by the landlord. Anyone who actually chooses the rental deposit for the loan should in any case draw up a personal financial plan, whether additional income can be expected in the foreseeable future or whether the repayment rates will only limit the quality of life to an acceptable extent. The rented home must be characterized by a feel-good character without permanent financial burden.

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