Different Methods of Furniture Financing Explained

Purchasing furniture that gives your home the look and feel you prefer can be challenging, especially when working within a budget. Thankfully, numerous financing methods are available that can make this task more manageable.

Understanding your options will help you choose the one that best suits your needs. We’ll explain the different methods of furniture financing to help homeowners and first-time buyers decide which strategy they should use. Transform your house into a home with quality, comfortable furniture that doesn’t break the bank.

Credit Cards

Many people use credit cards to purchase everything from groceries to big-ticket items like TVs. Their convenience and flexibility make them a versatile financing method for furniture purchases.

It’s common for credit cards to come with promotional offers, such as an introductory period with zero percent interest. Buyers often find these promotions attractive because they allow them to pay off their purchases over time without incurring regular interest charges.

Create a Credit Card Payment Plan

Homeowners and first-time buyers can benefit from creating a plan for paying off their furniture purchases before the promotional rate expires. This is because users with unpaid balances remaining after the promotion run the risk of incurring high interest charges. Practical budget-friendly actions you can take include:

• setting up automatic monthly payments
• earning and using rewards points or cashback on purchases
• avoiding overspending

Spending more than you’re able to repay can lead to debt, which can lower your credit score. If possible, strive to keep your credit utilization low, and pay off balances in full each billing cycle. By doing so, you can attain favorable credit scores, paving the way for better financing opportunities in the future.

Personal Loans

Personal loans are another practical way to finance large furniture purchases. These loans often include fixed interest rates and structured repayment terms, allowing you to budget payments confidently.

Unlike credit cards, personal loans do not have promotional terms. This straightforward structure allows borrowers to avoid unpredictable costs associated with promotions. Another plus for borrowers considering personal loans is the unsecured nature of this financing option; they don’t require collateral. This makes them appealing to furniture shoppers who don’t want to tie their borrowing to other assets.

Consider Your Credit

The interest rates of personal loans can vary widely depending on your credit score. In most cases, lenders reserve the most favorable loan terms for borrowers with solid credit, while those with lower credit scores may encounter higher rates. This can make personal loans less advantageous compared to other financing methods.

Compare Lenders

When seeking the best personal loan, compare lenders to find competitive interest rates and terms. Many loan providers let you see how you pre-qualify for estimated rates using tools that won’t affect your credit score. This can simplify the search process and help you secure the best deal.

In-Store Financing

Another avenue buyers can try is exploring the financing options offered by the store from which they plan to purchase their furnishings. Many furniture retailers offer in-store financing to make their products more accessible to customers. This option allows buyers to pay for their purchase over time directly through the store.

Typically, applicants must complete a credit application that the retailer reviews to determine eligibility. Then, successful applicants may receive benefits, such as a deferred payment plan.

In-store financing can be especially beneficial for homeowners shopping at a furniture store, such as Grand Furniture, that offers financing options, seasonal sales, and deals on quality furniture.

Grand Furniture offers in-store financing methods that suit individuals and families of all incomes and budgets. Shoppers with good credit, bad credit, or no credit at all can use the store’s credit process to get pre-qualified and approved for:

• no down payment plans
• low down payment plans
• low monthly payments
• up to 60 months of no-interest financing

Buy Now, Pay Later Services

Many furniture stores offer buy now, pay later services to accommodate the surge in popularity of this financing option. These services became popular—especially among young spenders—because they lend themselves to seamless integration into digital transactions.

Grand Furniture offers buy now, pay later furniture financing. When you choose to buy your furniture this way, you can purchase items now, and pay for them later in multiple, smaller increments. Doing so helps you avoid the high immediate costs that often come with large purchases. Plus, it prevents overspending.

Layaway Plans

Some furniture stores also extend layaway plans that allow customers to reserve furniture by making payments over time without incurring interest. Layaway plans are also interest-free. The most significant difference between layaway plans and buy now, pay later financing is that:

• You don’t immediately receive your furniture.
• You must make a down payment on your furniture.
• The store holds your items until you complete payments.

What’s more, layaway plans may include cancellation or service fees. For these reasons, you may benefit more from opting for a buy now, pay later plan, especially if your furniture needs are urgent.

Rent-To-Own

Rent-to-own is another furniture financing method. These programs allow you to lease furniture temporarily with the option to buy it outright after fulfilling specific terms. This financing option often appeals to those who may not qualify for other options due to limited or poor credit histories.

However, rent-to-own arrangements can come with high overall costs. Weekly or monthly payments and associated fees may add up to significantly more than the original purchase price.

Approach this financing method cautiously. Calculate the total cost over time to determine whether the added expense aligns with your financial goals. Compare it with other financing methods, and consider that others, like buy now, pay later plans, may be more flexible and attractive.