After bankruptcy, it becomes hard to make a big ticket purchase. You will more often than not have to buy an appliance. Be it a refrigerator, furniture, stove or washer; you will have to replace them. It will cost you thousands of dollars were you to buy the appliance without some form of financing. In this piece, you will be brought up to speed on what an appliance loan is as well as tips on getting the credit that suits your needs.
What is an Appliance Loan?
This kind of loan is a personal loan that you get to enable you to pay for a new appliance. This is quite often an unsecured loan that you can borrow from private lenders. Therefore with this type of loan, there is no need to give collateral as security for the money you get. Since this is an unsecured loan from private lenders, the terms and rates can differ from one lender to the other. Generally, expect some things like
- The loan amount starting from $1000 and $100,000
- Repayment terms can fall between 6 months to 7 years
- Interest rates can vary between 5% and 20%, although this is dependent on your credit score and whether you are signing with a cosigner.
Borrowing the appliance loan doesn’t have the same impact on your credit score as compared to using your credit card to purchase a new appliance. To get this loan is effortless and you get the funds within a week. Some of the most common rent to own financing include finance for HVAC, furniture financing, jewelry financing, laptop financing, engagement ring financing and much more. Therefore when you encounter an emergency, and you need to get an appliance or even furniture such as a sofa, (you know the average lifespan of a sofa is only 2958 days), then getting an appliance loan can be a perfect solution.
Getting an Appliance Loan
As stated above, getting an appliance loan is quite easy as most of the private lenders these days operate online. The whole process becomes less complicated. The moment you apply, most lenders will often send you an update within 24 hours. In case they need more details from you, they schedule a verification call with you.
They first need to verify your information, and when they are done, they usually send you a promissory note to be signed. Its until you sign it that they dispatch the money into your account within a week, generally within 2 to 3 business days.
The Benefits of Rent to Own Appliances
There are many advantages of appliance financing loans, especially when you desperately need a new or replacement appliance, yet you have no money for an upfront purchase, this loan becomes a great alternative.
The rent to own stores let you walk away with a new appliance at low, monthly or weekly payments and also, there are no credit checks. If for instance, you do not have enough credit to finance an appliance at the retail stores, the appliance financing is the way to go.
Another advantage of the appliance financing is that if you no longer need the appliance, or when you feel you can no longer afford it you are free to return it without being penalized or without damaging your credit score. Most centers for rent-to-own pick up the items that their customers feel they no longer need. When you fulfill your agreement by completing all the payment, then the appliance becomes yours entirely when your term comes to an end.
There are those rent to own companies that offer same-as-cash options for the agreed number of months into the rental agreement. This means that at that time, you are allowed to buy the rented appliance at a reduced price from the total rent cost that you have already paid.
Financing is not a bad idea. However, research thoroughly and find a company that offers the best rates. Know the tips to save money on appliance purchases. These may include, utilizing rebates, skipping the extended warranty, and using online price matching.