An Alternative To Security Deposits That Simplifies The Rental Experience & Helps Reduce Debt

Originally written by Adam West and published in badcredit.org.

In a Nutshell: Security deposits can pose challenges for both renters and landlords. That’s why Obligo developed a more convenient way to make the process more intuitive. Obligo adopted a model that has been used for decades in the hospitality industry which includes a preauthorized hold placed on a guest’s existing credit or debit card. Obligo adapts that strategy by using open banking technology to provide the same security to a landlord as a cash deposit. At the same time, this approach eliminates unnecessary time and effort on cash management and keeps funds available to renters to help pay off consumer debt.

Many workers live in rented housing because homeownership is out of reach. But instead of being a stopgap on the way to purchasing a home, renting can trap consumers in a cycle of debt, keeping the goal of homeownership further out of reach.

Since rental properties are commercial ventures, the cost of renting covers more than the landlord’s payments and expenses. Most renters are also required to pay a security deposit and first and last month’s rent upfront.