Your 10-year-old refrigerator just broke the day after you went grocery shopping. You realize it may be too old to repair, so you hit the nearest store to find a replacement. And as you look at the prices of new refrigerators, you realize something else; you don’t have enough cash to cover the purchase.
What can you do? Besides asking a friend or family member for a loan, you could use one of the financing options in this article to buy that costly fridge and keep your food from spoiling.
Why Appliance Financing Exists
Not everyone has hundreds or thousands of dollars to pay for new appliances. With financing, you can purchase the appliance you need (like a new refrigerator or washer and dryer) without having to wait. What is the downside to financing? Some types come with fees that can make the appliance more expensive than if you paid with cash. Let’s take a look at the different types of appliance financing to see which one best fits your financial situation.
The Top Types Of Appliance Financing
Since everyone’s different, we’ve come up with a list of different types of appliance financing for varying situations.
If You Have Bad Credit
It can be tough to find financing with bad credit. Luckily, financing is an option for bad credit borrowers who need to purchase appliances.
If you have zero cash to make a down payment and want to avoid a credit check, rent-to-own financing may be your ideal fit. Rent-to-own stores let customers take home appliances and lease them via affordable weekly or monthly payments. You can continue using the appliance as long as you make payments, and if you decide you no longer need it, you can stop paying and return the item. If you continue using the item for one to two years and make on-time payments, you can eventually own it. However, the total cost will be much higher than if you had paid cash, so keep this in mind.
Another option for borrowers with bad credit is in-house financing. Stores let customers apply for financing or credit cards to make big purchases and pay them off over time. You can also use that card to make future in-store purchases. Make timely payments and pay off the appliance before a specific date, and you may avoid interest fees.
If You Have Good Credit
If you have a high credit score and want to finance an appliance purchase, applying for a credit card with 0% APR for a promotional period may be your ideal fit. Pay off the balance before the promotional period ends, and you could avoid interest fees. The only downside to this option is that getting your card in the mail could take a week or two, keeping you from making that instant appliance purchase.
If You Need Quick Approval And Funding
Another option for appliance financing is a personal loan. This unsecured loan uses your credit history and income to help the lender calculate your interest rate. While you can usually apply online, get approved in minutes, and get funding the same or the next day, personal loans for appliances often carry higher interest rates and fees that can add up and make the cost of borrowing high. The lower your credit score, the costlier the loan will be.
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