At a Glance:
Pros and Cons of Financing Furniture
When you're thinking about renovating your home with some new furniture, it's always a challenge to balance your dreams and your budget - but furniture financing opens the door to turning your dream home into a reality without the immediate strain on your finances. Furniture financing is a practical solution that allows you to acquire products of higher quality while spreading the cost over manageable installments.
In this comprehensive blog, we'll explore the ins and outs of furniture financing, starting with an understanding of what it entails. Discover how to navigate the world of furniture financing and weigh the pros and cons. Plus, we'll delve into the unique financing options offered by Idler's Home, ensuring you're well-equipped to make the best choices for your home. Whether you're a first-time homeowner or looking to upgrade your interior, this guide will provide valuable insights into making your furniture purchases more accessible and manageable.
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Shop FurnitureWhat is Furniture Financing?
Furniture financing is a financial arrangement that allows individuals to purchase furniture, home decor, and related items through a structured payment plan, rather than paying for them in full at purchase. This arrangement provides consumers with the flexibility to buy the furniture they desire while spreading the cost over a specified period. Furniture financing typically involves a few key components:
- Personal Loan: Seek financial assistance from banks, credit unions, or online lenders offering personal loans tailored to individual needs. These loans often have fixed interest rates and a set repayment period, which clarifies furniture expenses.
- Credit Card: Utilizing a credit card for furniture purchases offers convenience but requires vigilance regarding interest rates. Depending on the card's terms, it might provide rewards or benefits, but carrying a balance could accumulate high-interest charges over time.
- Home Equity Loan: Leveraging the equity in your home, this option allows borrowing a lump sum with a fixed interest rate. It may be an attractive choice for substantial furniture investments, but it involves using your home as collateral, which is not often needed when financing pieces of furniture.
- Home Equity Line of Credit (HELOC): HELOCs establish a borrowing limit based on home equity, functioning like a revolving line of credit. Interest accrues only on the amount withdrawn, offering flexibility in managing expenses.
- In-Store Financing: Many retailers offer financing options with low or no interest for a specified period, making large furniture purchases more manageable. However, missing payments or exceeding promotional periods could result in hefty accrued interest charges.
Furniture financing allows consumers to acquire quality furniture and home furnishings without depleting their savings or taking on the full financial burden at once. It provides flexibility and convenience, making it easier for individuals to furnish their homes according to their preferences and budget constraints. However, it's essential to understand the terms, interest rates, and fees associated with furniture financing to make an informed decision that aligns with your financial goals.
How to Finance Furniture
Financing furniture can be done through the abovementioned methods, offering flexibility in managing expenses. Here are steps to consider when financing furniture:
- Evaluate Your Budget: Assess your financial situation to understand how much you can spend on furniture. This will help determine the financing option that suits your budget.
- Research Financing Options: Explore different financing avenues such as personal loans from banks, credit unions, or online lenders; credit cards with promotional interest rates; home equity loans or lines of credit; or in-store financing offered by furniture retailers.
- Compare Terms and Conditions: Compare interest rates, repayment periods, fees, and any promotional offers associated with each financing option. Understand the terms thoroughly to make an informed decision.
- Check Your Credit Score: A good credit score can help secure better financing terms. Before applying for financing, check your credit score and work on improving it if needed.
- Apply for Financing: Once you've chosen the financing option that aligns with your budget and preferences, apply for it. Provide the necessary documentation and information required by the lender or financing provider.
- Read the Fine Print: Before finalizing any agreement, carefully read and understand the terms and conditions, including any hidden fees, penalties for late payments, or changes in interest rates after promotional periods.
- Make Timely Payments: Whether it's monthly installments or credit card debt, ensure you make timely payments to avoid additional fees and maintain a good credit history.
- Plan for Repayment: Create a repayment plan that fits your budget to pay off the furniture financing within the agreed-upon period. Prioritize paying off debts to avoid accumulating interest charges.
- Monitor Your Finances: Keep track of your furniture financing payments and overall financial situation regularly. This helps in staying on top of payments and making adjustments if necessary.
- Consider Future Purchases: Think about how furniture financing will impact your future financial goals and purchases. Ensure it aligns with your long-term financial plans.
Remember, while financing furniture can be convenient, choosing an option that fits your financial situation and allows you to comfortably manage repayments without straining your budget is essential.
Pros and Cons of Financing Furniture
While we recommend reviewing a complete list of advantages and disadvantages of each financing option, we have compiled a general guide encompassing the most important notes:
Pros:
✅ Immediate Access: Financing allows you to acquire furniture without needing the total amount upfront, enabling you to furnish your space immediately.
✅ Budget Management: It offers the flexibility to manage your budget by spreading the cost over time through installment payments.
✅ Access to Quality Furniture: You can invest in higher-quality or more expensive, unaffordable furniture upfront.
✅ Building Credit: Responsible financing and timely payments can positively impact your credit score, potentially improving your credit history.
✅ Promotional Deals: Some financing options come with promotional offers like zero or low-interest rates for a limited period, making it a cost-effective choice.
Cons:
❌ Interest Costs: Financing often involves interest payments, increasing the overall cost of the furniture. If not appropriately managed, interest charges can accumulate significantly.
❌ Debt Accumulation: Taking on additional debt for furniture can add to existing financial obligations, affecting your overall debt-to-income ratio.
❌ Potential Fees: Hidden fees, late payment penalties, or charges for early repayment might be associated with specific financing options, increasing the total cost.
❌ Credit Score Impact: Applying for financing may result in a temporary dip in your credit score due to inquiries or new credit accounts.
❌ Risk of Overspending: Without a clear repayment plan, there's a risk of overspending or impulse buying, leading to financial strain in the long run.
Understanding these pros and cons helps make an informed decision about furniture financing.
Idler's Furniture Financing
Idler's offers two additional options for financing your furniture: BrandSource Credit Card and Acima Financing, two different financial services that cater to consumers' needs in purchasing products.
BrandSource Credit Card
The BrandSource Credit Card is part of a network of locally-owned appliance, electronics, and home furnishings stores across the United States. The credit card allows customers to access various financing options, special promotions, and exclusive offers when purchasing at participating BrandSource stores, including Idler's. Like many store credit cards, it often offers benefits like flexible payment plans, discounts, and rewards for frequent shoppers.
Acima Financing
On the other hand, Acima Financing is a lease-to-own program that provides a different approach to purchasing goods, especially for individuals with less-than-perfect credit scores. Acima doesn't focus on credit scores for approval but instead emphasizes a customer's ability to pay. It allows customers to lease items with the option to own them after a specific period, making it an accessible option for those who might not qualify for traditional financing options due to credit constraints.
Both options aim to provide accessible financing for consumers seeking to buy products but cater to different needs and financial circumstances. But as mentioned above, with any financing option, consumers must understand the terms, interest rates, and repayment plans before committing to ensure they align with their financial goals and capabilities.
FAQ
Does furniture financing build credit?
Furniture financing can build credit if the financing company reports your payment history to the credit bureaus. Making regular, on-time payments demonstrates responsible credit management, positively impacting your credit score. However, not all furniture financing arrangements report to credit bureaus, so it's crucial to confirm this before opting for such financing to build credit. Responsible borrowing and timely repayments contribute to a positive payment history, but missing payments or defaulting could harm your credit score. Therefore, managing furniture financing responsibly is critical to leveraging it as a tool for building credit.
Where can I finance furniture?
You can finance furniture through various options, including furniture stores that offer in-house financing or partner with financing companies (Like us!). Many credit card providers also offer special financing deals for furniture purchases, often with promotional interest rates. Additionally, you can explore personal loans from banks or online lenders, which can provide the flexibility to finance your furniture independently.
Can I finance furniture with bad credit?
Yes, it's possible to finance furniture with a bad credit score through specialized financing options tailored for individuals with less-than-ideal credit. Some furniture stores or financing companies offer programs that consider factors beyond credit scores, focusing on your ability to make payments. However, these options often come with higher interest rates or additional fees. Carefully reviewing the terms and ensuring affordability is crucial. Successfully managing such financing by making on-time payments could improve your credit, but it's important to proceed cautiously to avoid further financial strain.
Why Trust Idler's Home?
At Idler's Home, we believe in providing our community with the highest quality products and services. Over the span of 70 years (and counting), our business has seen successful growth, with over 100 employees and five locations along the central coast of California. We offer significant appliances, quality furniture, and the best mattresses, but we also provide hot tubs and swim spas and perform kitchen design services. In addition, our trained professional installers can set up all appliances we sell while our factory-trained technicians service and repair them if they break down. Suffice it to say that Idler's is dedicated to helping you realize your vision for your home.
Shop Furniture at Idler’s
Envision the possibilities for your home and shop furniture online at Idler’s. Our friendly team is always happy to help you finance furniture — whether you call us, email us, or use our online chat feature. Or better yet, stop by any of our five Central Coast locations to experience the quality of our products yourself. Visit us today!
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