Appliance Financing: How To Find The Right Option
Miranda Crace6-Minute Read
UPDATED: November 30, 2023
Many homeowners consider household appliances an essential part of their home. Household appliances can serve multiple purposes and generally make life easier, but some appliances come with a hefty price tag.
Fortunately, several financing options are available for buying appliances, but they vary based on their minimum credit score requirement, interest rate and financing term.
Let’s take a close-up look at your appliance financing options so you can find the one that’s best for your situation.
What Is Appliance Financing?
Appliance financing, or an appliance loan, lets you buy a household appliance with borrowed funds. You’ll repay these funds over time, usually in monthly increments. Since appliances tend to be expensive, financing can be extremely helpful when replacing broken devices and upgrading to newer or more energy-efficient models.
While it’s nice not having to pay for an appliance in full at the time of purchase, be sure to consider your interest rate and loan term when choosing a financing option. As with most financing, your credit score can play a huge role in getting approved and the terms you receive.
Building your credit before exploring your options can be a good idea. A higher credit score tends to open up more opportunities and can help you secure an ideal term and rate.
What Can You Use Appliance Financing For?
You can use appliance financing for just about anything related to home appliances – but you may want to avoid taking out a loan to buy luxury items, such as espresso machines, wine fridges or juicers. Appliance financing works best for necessities, such as washing machines, ovens and refrigerators.
Let’s consider some of the possibilities that appliance financing can offer you.
Financing A New Washer And Dryer
A functioning washer and dryer are essential to living a healthy, hygienic lifestyle. It’s almost unheard of to have one and not the other. Appliance financing can help you afford one or both machines without derailing your finances.
Financing A New Refrigerator
If your refrigerator breaks down, you may need a quick solution before all your food goes bad. If you don’t have the cash on hand to buy a new fridge, appliance financing can help get you one when you need it.
Upgrading Kitchen Appliances
Suppose you’re doing a full kitchen remodel. This can mean upgrading your oven, cooktop and dishwasher to the newest models. Some kitchen remodel financing options cover home appliances. If not, though, you could get separate financing for the appliances you want.
Options For Financing Appliances
Below are four of the most common options for appliance financing. Take a moment to review them and see which one seems most suitable for your financial situation.
Minimum Credit Score Requirement
Time To Funding
*Same day or 1 – 7 business days
580 – 649
No credit check
Varies by card provider
7 – 10 business days
Get A Personal Loan
A personal loan can be used for just about anything, including new appliances. Many personal loans are unsecured, meaning they don’t require collateral. Qualifying for a personal loan will largely depend on your credit score and debt-to-income ratio (DTI). A credit score of at least 650 can help you secure a lower interest rate.
Assuming your credit score is high enough, you can start the application process by getting prequalified. This may involve a soft credit check, and it tells you the rate and term you qualify for. After comparing lenders, you can submit an application along with the necessary documentation. If you’re approved for the loan, you may receive your funds within a day to a week of your approval.
Rocket Loans℠ can also offer same-day financing to certain applicants, so borrowers may receive their money the day they apply.*
Ask About In-House Financing
Depending on where you buy your appliances, you may be able to secure in-house financing. This usually comes in the form of an in-store credit card. You can charge purchases to the card and pay them back over time, but this type of financing is only good for purchases from your retailer of choice. In-house financing may come with a sign-up bonus, such as a no-interest repayment period.
Qualifying for in-store financing often requires a credit check and a credit score in the 580 to 649 range. You can usually sign up for these cards at the store’s checkout counter or online.
Because this financing is only valid for a single retailer, though, you’re limited to that store’s pricing. And, once the interest-free period ends, you’re charged the full interest rate on your payments.
Some retailers may offer a leasing option where you can take a product home and make weekly or monthly payments in exchange for using it. If you stop making payments, you must return the appliance, which you’re typically free to do at any time. If you keep making payments, you’ll usually own the appliance after a period of 12 – 24 months.
A rent-to-own agreement typically doesn’t require a credit check. However, you’ll have to share some personal information and possibly some references. The downside to leasing is that you may end up paying more over time than it’s worth, depending on the associated fees.
Buy An Appliance With A Credit Card
If you have a credit card, using it to pay for an appliance is an option. Although interest rates with cards are typically high, you can sign up for a new card with a 0% APR period. During this promotional period, you can typically repay funds interest-free for 12 – 18 months. If you don’t pay off the appliance during that window, you can face a high interest rate and possibly go into more debt.
How To Choose The Right Appliance Financing Option For You
Before choosing how you’ll finance your appliance purchase, it’s best to research and weigh the requirements of each option. To help determine which one would work best for you, ask yourself the questions discussed below.
Before choosing how you'll finance your appliance purchase, it’s best to thoroughly research and weigh each option.
- Does this option require a credit check? If you’re worried your credit score is too low to qualify for a good interest rate, you might want to consider an option that doesn’t require credit
- Is there a minimum purchase amount? Some in-house financing options and credit cards could require a minimum purchase amount. Before using either option, make sure the appliance you plan to buy meets or exceeds this dollar amount.
- What is the monthly payment amount? Loans and lines of credit require users to make a minimum monthly payment. Before you submit a credit card or loan application, make sure you can afford this expense each month.
- What is the APR? The annual percentage rate – sometimes called the purchase APR on a credit card – can help you evaluate the cost of using a specific type of financing. You’ll want an option that offers the lowest possible APR to help you save on interest and fees.
- What term length would work best? If you use a personal loan, you’ll want to make sure the lender you choose offers a repayment term that fits your needs. The longer the term, the lower your monthly payment amount will be.
- Are there additional fees? Credit card issuers – and some personal loan lenders – may charge borrowers extra fees for using their services. These costs could include a minimum interest charge, annual fee and processing fees.
FAQs About Appliance Financing
You may still have some questions after reviewing your options for appliance financing. Below are some common questions about this topic.
Will appliance financing hurt my credit?
Financing such as personal loans requires a hard inquiry, which can affect your credit, depending on the loan amount. If you make your payments on time and use your financing option wisely, your credit shouldn’t otherwise be negatively affected. In fact, making on-time payments may even improve your credit.
Can I finance appliances with no credit check?
Rent-to-own financing typically doesn’t require a credit check. You just may need to provide information such as your name, income data and housing status. Some retailers may ask you to supply one or more personal references to qualify.
Can I get appliance financing with bad credit?
In-house financing tends to have a lower credit score requirement than the typical credit card. Again, a score between 580 and 649 is generally acceptable, but you can only use these funds in that store. By taking steps to improve your credit score, you may gain access to even more financing options.
Purchasing new home appliances can be expensive, but it’s often necessary. Many appliance financing options are available, however, allowing you to choose the most ideal one for your unique financial circumstances.
If you think a personal loan will work well for you, you can get started today with a prequalification from Rocket Loans.
*Same Day Funding available for clients completing the loan process and signing the Promissory Note by 1:00PM ET on a business day. Also note, the ACH credit will be submitted to your bank the same business day. This may result in same day funding, but results may vary and your bank may have rules that limit our ability to credit your account. We are not responsible for delays which may occur due to incorrect routing number, account number or errors of your financial institution.
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