More Long Island renters are borrowing to pay rent. Is that a lifeline or a warning sign?

William Bailey, a renter in Elmont, used a so-called "rent now, pay later" service once.

He tried the rent-splitting app Flex one month at his wife's suggestion. He recalls paying around $20 to pay their $2,850 rent in two installments. Bailey said his wife saw it as a way to stretch their budget when they needed to — but he's wary of the service.

It seems that, "in the long run," short-term lenders are "banking" on customers owing money, said Bailey, who is also a local housing advocate.

As housing costs and affordability pressures have grown, thousands of Long Islanders have turned toward financial services that allow tenants to pay rent in multiple installments. Creditors say this is a way to help renters manage cash flow. But some consumer advocates warn that the loans help prop up high rents and can be an expensive form of credit, adding another cost chipping away at affordability.

"At the very least, it's another fee for the cost of rent on top of everything else," said Adam Rust, director of financial services at Consumer Federation of America, a Washington-based association of nearly 200 nonprofit consumer organizations.

Tough rental market

On Long Island, renters face a competitive market with increasingly low vacancy rates and a lack of inventory, pressures that have led to average asking rents over $3,000 per month for apartments, Newsday has reported.

So far in 2026, 3,109 Long Islanders have paid bills using Flex, according to data provided by the company in early July. Statistics about how many Long Islanders use similar services were not immediately available. Affirm and Esusu declined to provide regional statistics for their pilot program that rolled out earlier this year. Livble and Split Pay did not immediately respond to requests for comment.

3,109 LIers paid bills with flex

so far this year, company data showed earlier this month

Many Long Island landlords enrolled with "pay later" rent services own large apartment complexes, according to the nonprofit Long Island Housing Services.

That includes FirstService Residential, a property management company with a portfolio that includes housing complexes on Long Island. The company has started to offer Livble at some properties.

"Across the multifamily industry, we're seeing growing interest in payment flexibility as residents look for options that better align with their cash flow," said FirstService Residential Senior Vice President Calynne Oyolokor in an emailed statement.

Carly Solomon, a leasing manager at Rosemont Brookhaven who uses Flex to pay her own rent, likes that the service allows her to build credit while paying rent. She uses the platform for free because her employer, property management firm Titan Corp, has partnered with the financial company.

It's good to have that flexibility.

— Angie Rodriguez, 25, a Central Islip renter

At Rosemont, an apartment complex in Bellport where she also lives, Solomon encourages other tenants to use the service as well. But for people paying full price, it will cost a $5.99 monthly membership fee, 0.5% of the total rent amount and a 3% split fee based on the amount borrowed for their second payment.

On a recent sunny day in Ronkonkoma, other Long Island renters said they have not used rent-splitting services and had mixed reactions about whether they would.

Central Islip renter Luna Perez, 25, expressed concern about the short-term loans leading to more debt. Meanwhile, Ronkonkoma renter Angie Rodriguez said rent-splitting services seem like a useful tool.

"It's good to have that flexibility," said Rodriguez, 48.

Not quite the same as BNPL

Creditors offering short-term loans for rent say their services differ from "buy now, pay later" providers.

Flex, for example, offers an open-ended line of credit that allows users to repeatedly borrow and repay a limited amount of funds — similar to a credit card, said Ryan Metcalf, vice president of public affairs for the company. Closed lines of credit, like BNPL, provide users with funds that are repaid in fixed installments.

Flex also doesn't report late payments to credit bureaus, doesn't charge late fees or compounding interest, and doesn't allow borrowers to loan stack, Metcalf said.

Affirm and Esusu rolled out a partnership earlier this year that works similarly, allowing renters to split rent into two payments with underwritten loans for zero interest, no late fees and no ability to loan stack, said spokespeople for the two companies.

Esusu has been offering zero-interest loans to renters since 2020 through the Stable Home Fund, said company founders Wemimo Abbey and Samir Goel.

Consumer advocates say rent loans indicate 'market failure'

Consumer advocates highlighted the rise of short-term loans to cover rent as a symptom of a growing affordability crisis.

"It's becoming very hard to get by in America with the cost of rent, food and gas. Not surprisingly, private equity and fintechs are seeing an opportunity to build products that could have very high rates of return on this relatively desperate market," Rust said.

He highlighted both the cost of using short-term loans and the risk of lenders auto-debiting accounts to recoup funds, potentially leading to additional fees.

If you told my grandparents that they needed to go into debt to make their rent, they would be aghast.

— Mike Pierce, executive director at nonprofit Protect Borrowers

Many rent-splitting creditors also provide rental payment platforms to landlords, presenting a conflict of interest, said Mike Pierce, executive director at nonprofit Protect Borrowers.

Normally, landlords that set rent too high would need to be responsive to tenants and their ability to pay, he said. "If they set their rent too high, they would work something out. Instead, they're pushing debt on their tenants. And the companies are really happy to play both sides of the house."

Calling the emergence of the loan type a "sign of market failure," Pierce added: "One of the things that's a concern there is that this is sort of a backdoor way for landlords to avoid lowering rents if they've set their rent too high and their tenants can't pay."

"If you told my grandparents that they needed to go into debt to make their rent, they would be aghast," he said.

What kind of protections exist?

New York has proposed legislation for other "buy now, pay later" products that would require BNPL lenders to clearly explain loan terms to borrowers, limit interest and late fees, and require underwriting, among other things, Newsday has reported. 

In the meantime, consumers using short-term loans for rent still have protections under state and federal law, said Stephen Aschettino, a partner and chair of the fintech practice at national law firm Fox Rothschild.

"They're treated essentially like lending products. And while there are federal lending credit laws, typically it's the states which have a greater role in regulating these types of players," he said. What will matter when it comes to consumer protections is whether, legally, regulators consider rent a good or service.

Plus, the structure of a product will likely "matter quite a bit," he added. "Some of these rent-splitting products involve credit lines, bank partners, payment processors, loan services and other structures that may produce different regulatory outcomes."

New York law regulating consumer products is applicable based on the type of credit offered and the terms of the agreement between the lender and consumer, according to the state Department of Financial Services.

Emerging "pay later" products may each "be subject to different laws and regulations depending on particular facts and circumstances of those products and company structure," a department spokesperson said in an email.

Policymakers should establish clear boundaries between rent payment platforms and "pay later" products, Pierce said. "The idea that a company can do both of these things, collect payments on behalf of the landlord and push debt on tenants, is bad public policy."

Rent lenders like Esusu and Flex said they follow consumer protection laws such as the Fair Credit Reporting and Truth in Lending acts, and are subject to federal oversight by the Consumer Financial Protection Bureau.

"The key point is what the renter is going to pay in total," Aschettino said. "That should be clear and conspicuously disclosed at the outset."