Best Appliance Financing Options

Appliances are an important part of your home. If one of them breaks, you’ll have to quickly replace it, but it’s common for appliances to cost hundreds of dollars. Some refrigerators can even cost thousands of dollars to replace. Not everyone has enough money in their savings account to cover appliance costs. Financing can help cover any gaps. This guide will explore your choices, but you may want to consider some of these personal loans as well.

​​If you’re looking for easy access to funds, MoneyLion offers a service to help you find personal loan offers. Based on the information you provide, you can get matched with offers for up to $50,000 from our top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you.

How does appliance financing work?

Appliance financing allows you to make an expensive appliance more manageable through monthly payments. These payments can fit into your budget more seamlessly than a sudden expense that can cost thousands of dollars. 

Some appliance financing methods are quick and don’t require any approval. Other financing avenues require that you have a sufficient credit score and debt-to-income ratio.

6 appliance financing options for good and bad credit

These are some of the appliance financing options you can consider. 

1. Personal loans

A personal loan is a popular financial product for covering large purchases. You will receive a lump sum to cover the expense and then have to make monthly payments toward the loan. You can choose the term length, and some lenders will let you have more than five years on your personal loan.

Most lenders will have credit score requirements and run a hard credit check to assess your credit profile. You’ll also need a sufficient debt-to-income ratio that demonstrates you can make monthly payments. Even if your income is higher than the personal loan payments, creditors may not want to work with someone who has half of their income already going toward financial obligations. 

Some personal loan providers do not have credit score requirements. These lenders offer more choices for people with bad credit, but you will likely end up with a higher rate. Most personal loans have fixed interest rates which means the monthly payments remain the same.

Pros

These are some of the advantages of getting a personal loan.

• Competitive rates
• Fixed monthly payments
• Flexibility to choose the loan length based on how much you can pay

Cons

You may want to consider these disadvantages of getting a personal loan before getting started. 

• A credit check is often required
• You need to fulfill the lender’s requirements (i.e., credit score, debt-to-income ratio, and other requirements)
• It may take a few days to get a loan

2. In-house financing

Many appliance companies offer in-house financing. This approach offers quicker approval decisions and allows you to get the appliance sooner. Appliance companies may also run special deals, such as no interest payments if you repay the loan within 12 months. 

You will still have to go through a credit check. Lenders will also assess your debt-to-income ratio to ensure you can keep up with monthly payments. In-house financing is easier and more convenient, but it may come with higher rates and fees than personal loans. 

Pros

These are some of the advantages of in-house financing.

• Typically easy and convenient
• Quicker approval times
• Sometimes special incentives and perks you won’t find with personal loans

Cons

In-house financing has the following disadvantages.

• Higher rates and fees may apply
• Fewer choices
• A credit check is often required and you will have to fulfill some requirements

3. Instant cash apps

Instant cash apps aren’t loans. You won’t have to pay interest or do a credit check. Companies that offer instant cash usually check your banking history to assess your maximum cash advance. While some cash apps let you access only $100-$200, you could access  up to $500 with MoneyLion’s Instacash^SM. The only fee you could pay is if you choose the optional expedited delivery, within minutes. 

You may have to build up to the maximum cash advance limit with good banking history. MoneyLion and other apps will review your accounts to assess how much you deposit each month. A higher amount will bump you to a higher limit and get you closer to the maximum.

However, you will need another funding source if the appliance costs thousands of dollars. Instacash and other cash advance apps work best for appliances you need to replace immediately and that are under $1,000.

Pros

These are some of the advantages of instant cash apps.

• No interest
• No credit check
• Quick access to funds (1-3 business days or within minutes)

Cons

These are some of the drawbacks of instant cash apps.

• These apps draw funds from next week’s paycheck to cover current balances
• Repaying a cash advance does not improve your credit score
• There is usually a fee if you want to receive funds instantly instead of within 1-3 business days

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PRO TIP! You can access up to $500 of your paycheck, any day with MoneyLion Instacash^SM. No interest. No credit check. No mandatory fees.

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4. Credit cards

If you already have a credit card, you don’t need approval to spend your credit as you desire. There’s no delay and you can even receive rewards like points and cash back for your purchase. However, you have to make sure you do not exceed your credit limit. Appliances can get expensive, and not all of them are suitable for credit cards. 

Furthermore, credit cards have higher interest rates than other financial products. You can get around this disadvantage if you recently opened a credit card that has an introductory 0% APR for 12-18 months. Since you already have a credit card, you won’t have to go through a credit check or fulfill any requirements around your credit score or income.

Pros

Credit cards offer the following advantages.

• No credit checks
• Potentially high limits
• Immediate access to credit plus rewards

Cons

Using credit cards for appliance financing can have these drawbacks.

• Higher interest rates than most financial products
• The risk of maxing out on your credit card
• Having less space on your credit balance for other purchases

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PRO TIP! Explore credit and debit card options tailored to different needs and preferences.

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5. Rent-to-own

This approach gives consumers with bad credit history the opportunity to make low monthly payments on their appliances. Your credit will still get checked, but you won’t have to take out a loan or a line of credit. 

You have the option to pay off the contract early. Paying in full lets you own the appliance sooner and put an end to monthly payments. Most terms range from 4-6 months, but they are expensive in the long run. You’ll end up paying more than the market value of the appliance. The main draws for rent-to-own are the model’s flexibility and ability to get an appliance even if you have bad credit.

Pros

These are some of the perks of rent-to-own.

• You can get an appliance with bad credit
• No need for a loan or a line of credit
• Quick approval usually

Cons

Rent-to-own has the following disadvantages.

• Credit check often required
• Typically more expensive in the long run
• You will lose the appliance if you stop making payments

6. Personal savings

If you have enough money in your bank account, you can consider tapping into your personal savings to cover the purchase. This option has many benefits. You can access funds immediately and won’t have to worry about interest, fees, or a credit check. This route avoids a lot of complexities associated with loans, in-house financing, and other alternatives. 

Personal savings isn’t an option for everyone, and even if it is, you should assess your financial profile before making a decision.

Pros

These are some of the advantages of using personal savings to cover appliance costs.

• Immediate access to funds
• No credit checks, interest, or fees
• You won’t tack on another expense to your budget

Cons

A personal savings account is a great resource for covering big expenses, but these are some of the drawbacks to consider.

• Less funds available for an emergency expense
• The opportunity cost of knowing that you could have put the money into investments
• You will not build your credit score with this purchase

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PRO TIP! MoneyLion offers a convenient marketplace to compare high-yield savings accounts from our trusted partners that could help grow your money.

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Making Appliances More Affordable

Appliance financing makes these essential resources more accessible. Instead of having enough money to buy an appliance in full, you can choose monthly payment options. Some choices are better than others, but knowing the different options can help you find the right appliance financing method for you.

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