Who needs payday lenders and their sky-high interest rates when startups are more than happy to issue loans to millennial renters just scraping by in the share-economy?

StayTony, Domuso, Till and Uplift are among the startups issuing loans to recent college graduates and those with irregular paychecks, with borrowing rates that are often under 20 percent, the Wall Street Journal reported.

The downside is that it may lead young renters to live beyond their means. Because cities often have steep costs of living, the loans can affect borrowers’ credit scores and pile on long-term debt.

The crop of startups is entering the field as housing costs have outpaced wages. Median rent nationally hit an all-time high of $1,006 a month in the first quarter of 2019, the report said. That’s led some renters to loans. Outstanding consumer credit, which doesn’t include mortgage loans, exceeded $4 trillion for the first time last year.

Some companies offer loans as a backup. Till, for example, pitches its financing as a tool to avoid evictions. Data on defaults is difficult to source, but the “serious” borrower delinquency rate on unsecured personal loans was 3.6 percent in the fourth quarter of 2018.

Still, there are considerable risks in issuing debt to consumers with inconsistent income. One, Rentlender, has already restructured, and another, Domuso, has already tightened its lending standards and won’t issue loans to renters with subprime credit. [WSJ] — Meenal Vamburkar