There are many reasons for seeking furniture financing, and there are just as many furniture credit options available to you. In some cases it makes financial sense to pay for furniture over a period of time, particularly if you can get interest-free credit. Rather than furnish your home by paying cash, you can keep the cash in a savings account earning interest while you repay the furniture interest-free over 6 months or even a year.
This could amount to a significant sum for a young couple purchasing their first home and having to furnish it starting only with any furniture given as wedding presents. Others might have to purchase furniture at a difficult time, such as when moving house: you will have plenty other expenses to face other than furnishing your new home, so furniture financing will come in very handy.
There are also furniture credit options available for those who have previously fallen on hard times and perhaps have a bad credit record. You may be repaying bad debts, but cannot get unsecure credit such as a credit card or store card because credit score has not improved sufficiently for you to pass the check. You could take a secured loan if you own your home, but what if you rent? In any case, secure loans are to be avoided because you could lose your home if you default on the repayments.
Irrespective of the reason for you seeking furniture financing, there are furniture credit options available to meet any of the scenarios described above. Here are just a few of the types of finance available.
Your preferred furniture store might offer you a store credit card issued by a firm such as Wells Fargo. The card enables you to purchase any item from the store concerned up to a set credit limit. This is a very convenient method of furniture financing, and many card issuers will offer an interest-free agreement for a set period or if individual purchases reach a certain minimum amount.
For example, one store credit card arranged through Wells Fargo offers 6 months interest free on their card, or a whole year free of interest if a minimum $500 purchase is made. This would generally be a single receipt rather than if the total sum owed reached $500. However, considering the average consumer credit card rate is currently 16.9% in the USA, a $1,000 spend on furniture would save you $169 during that year! That’s a significant saving.
Not only that, but some furniture stores offer exclusive benefits to customers using their card. Some of these operate on a rewards system while others offer reduced prices on certain goods only for those customers using the card to make payment. Such credit cards are fine if you repay the furniture within the interest-free period. If you go over that period, then it could get expensive.
2. Unsecured Loan
Failing that, you may be able to get furniture credit in the form of an unsecured loan. This is a form of furniture financing where you offer no security for the sum required, and the lender relies on a good record of repaying past credit. A credit report will usually be obtained and if your credit is good then you get the loan.
You can often apply for the loan online, and will have to provide all your financial details, such as your total income, mortgage or rent payment and details of any existing credit and loans. Once you have been approved, you receive the cash or are enabled to purchase furniture up to the sum approved, and you can then buy your furniture. This is obviously a more expensive furniture financing option than the free-interest card. However, the sooner you repay the sum borrowed the less expensive it will be. Some firms apply a 90 day limit, while others allow much longer.
If your credit is shot, then your furniture credit options are very limited. However, it will still be possible to borrow money for your purchases at a higher interest rate. You would normally use this option only when it was imperative that you purchase the furniture you need. Many are locally based, and you must live in-state.