Several startups are now offering loans to recent college graduates, professionals moving to a new city and others who want to build credit or could use assistance making rent payments, the Wall Street Journal reported. These companies, which also include Uplift, Domuso, StayTony and Till, are entering a market long associated with payday lenders. Compared with cash-advance loans, which come with annual interest rates as high as 700 percent in some states, funds from the rent-lending startups are available at much lower cost. Some are competitive with credit-card borrowing rates at less than 20 percent. The pitfall to such credit is that the loans might encourage some young renters to live beyond their means. Large cities often have a high cost of living that can push residents ever deeper into long-term debt and strain their credit scores. Outstanding consumer credit, which doesn’t include mortgage loans, exceeded $4 trillion for the first time last year, according to data from the Federal Reserve.
