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How should you pay your rental deposit?

Rent, deposits and letting agent fees are rising in price. Here's how to pay your deposit and whether you should consider borrowing the money or using a credit card.

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How you can pay

This is up to your landlord or letting agent, but they may let you pay by:

  • Debit card

  • Credit card

  • Bank transfer

  • Cheque

Some private landlords accept cash. If you pay with cash, ask for a receipt in case you need proof of how much you paid in the future.

If you have the money saved up already, using this is usually your cheapest option. If you can't afford a deposit yet, you need to save up or borrow the money.

How to save up a deposit quickly

You can save a deposit by putting as much as you can afford each month into a savings account. Increase how much you can save by:

Here is how to choose a savings account that suits your needs.

How to save enough money to move house

How much do you need to save for a deposit?

Most landlords charge at least one month's rent for a deposit, and often more. Letting agents usually charge for referencing and other admin fees. The average rent per month in the UK is around £710.

Could you borrow the money instead?

If you do not have enough saved for a deposit, you could borrow money and pay it back over several months.

But the interest you pay can make it much more expensive than using money you have saved. Paying back a loan can also make it harder for you to afford your rent.

Landlords usually prefer tenants who have saved up enough cash for a deposit. This is because it shows you are financially reliable.

Some might not rent their property to you if you are in debt because you could struggle to afford your rent as well as your loan repayments.

How would a landlord know I borrowed money?

Landlords and letting agents usually run reference and credit checks before they offer you a property. They could see that you have borrowed money from your bank statement or credit record.

Can you pay a deposit with a credit card?

Yes, some letting agents let you pay your deposit by credit card. But they often charge a fee of 2% of the deposit amount or more.

Private landlords almost never accept credit card payments, and some letting agents do not accept them either.

This is because landlords can't usually take credit card payments, and they cost more for letting agents to process.

If you decide to pay by credit card, you could choose one that offers interest free purchases. This could let you pay back the deposit amount over several months with no interest charges.

Can you get a loan for your rental deposit?

There are several ways to borrow money, including:

Make sure you can afford the repayments on top of your rent and the rest of your living costs before you apply for any type of loan.

Here is how to work out the cheapest way to borrow money

Can you borrow from family or friends?

If your parents, family or friends can lend you money for your deposit, this could work out much cheaper, especially if they charge no interest.

Make sure you get your deposit back

You should get your deposit back when you move out if you:

  • Keep to the terms of your tenancy agreement

  • Pay your rent on time

  • Avoid damaging anything while you live there

  • Tidy and clean the property when you move out

Here is how to make sure you get all of your deposit back

Check your money will be safe

Landlords and estate agents can't keep your deposit in their own bank account: they have to pay it into a Tenancy Deposit Plan (TDP).

This stops them spending it and gives you extra protection that could help you get your money back when you move out.

How to make sure you don't get ripped off by a letting agent

What if something goes wrong?

If your landlord does not give your deposit back, you may be able to get it back from the TDP scheme. You could also take your landlord to court to get your money back.

Protect your home and belongings for less by comparing home insurance policies to cover a range of property types and individual circumstances.

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