How do I evaluate student loans on a tenant application?

Question

I received an application from a tenant who is otherwise qualified, but the credit report shows over 100K of student loans remaining. I am concerned about the monthly payment required to pay these loans, but the applicant states that she only has to pay $275/month. Is this temporary (a type of COVID-relief measure)? Does anyone have experience renting to tenants with high student loans?

Daniel Umstead · Answer

References might be beneficial as well from past landlords

Tommy Parker · Answer

I think if the tenant is qualified otherwise and they are current on those payments they are good. I know some tenants who are deep in student loan debt but still pay their rent on time. Going forward it would be great to get a number you would allow for student loans. Best of luck on this!

Brandon Vanderford · Answer

Right, thanks for the feedback! A default is a major red flag. My main concern is verifying the expenses to income ratio, and confirming how much the student loans cost the holder on a regular basis. That is not reflected on the report that I received from Zillow, unfortunately.

Daniel Umstead · Answer

Hi Brandon,

Being on the other side as a student loan recipient, the biggest disqualifier that comes up is if they defaulted on their loans. I currently am not as high as $100k in student debt, but a good amount. I have been current on my student loans but I have been told that if I ever defaulted on them that it would be a huge credit risk, hope this helps.

Best,
Daniel

Scott Mac · Answer

A hundred G's, how many down payments could that be used for--down the tubes and gone.

A hundred G's and she must now be a renter--down the tubes.

A hundred G's--gone--like dust in the wind.

I'm sure some of the people in here could turn hundred G's into a million dollars investing in real estate.

How many people in here would love to have $100,000 to start out with--now it's gone.

Now it's gone.

How do I evaluate student loans on a tenant application?

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