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Appliance Financing: How To Pay For Expensive Home Appliances

Hanna Kielar5-Minute Read

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Many homeowners consider household appliances an essential part of their home. They can serve multiple purposes and generally make life easier. Some appliances can come with heavy price tags, though, and if you live on a strict budget, replacing or updating an appliance could create a difficult financial situation for you.

Fortunately, there are several financing options available for buying appliances, so that you can get that new refrigerator and still be able to afford food to put in it. Since everyone’s financial situation is different, options can vary based on required credit scores, rates and terms. To find out which one would work best for you, read the article below and learn the ins and outs of your appliance financing options.

What Is Appliance Financing?

Appliance financing, or an appliance loan, allows you to purchase a household appliance with borrowed funds that you can repay over time, usually in monthly increments. As appliances tend to be expensive, appliance financing can be extremely helpful when replacing broken appliances, upgrading to newer models or purchasing more energy efficient ones.

While it’s nice to not have to pay for an appliance in full all at once, be sure to consider interest rates and loan terms when deciding on a financing option. As with most financing, your credit score can also play a huge part in qualifying for financing. It’s a good idea to try to build your credit up before exploring your options, as higher credit scores tend to open up more opportunities.

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What Can You Use Appliance Financing For?

You can use appliance financing for just about anything related to home appliances. Let’s take a look at some of the possibilities appliance financing can offer you:

  • Financing a washer and dryer purchase. Having a working washer and dryer can be essential to living a healthy and hygienic lifestyle, and you usually wouldn’t have one without the other. With appliance financing, you can afford one or both machines without derailing your personal finances.
  • Financing for a new refrigerator. If your refrigerator breaks down unexpectedly, you may need a solution fast before all your food goes bad. If you don’t have the spare cash on hand, appliance financing can help get you a new fridge when you need it.
  • Upgrading your kitchen appliances. Suppose you’re doing a full kitchen remodel. That can mean upgrading your oven, stove or dishwasher to the newest models. Some kitchen remodel financing options can cover home appliances, but if not, you could get separate financing for the appliances you want.
  • Getting a bigger television. TVs are getting bigger – and more expensive. If you want a bigger screen for the family room, or your own personal home theater, appliance financing may be able to help you get over the price hurdle.

Options For Appliance Financing

Below are four of the most common options when it comes to appliance financing. Let’s review them and see which one might work best for your financial situation.

Get A Personal Loan

A personal loan can be used for just about anything, including new home appliances. Personal loans are typically unsecured, meaning they don’t require collateral in order to secure the loan. Qualifying for a personal loan can instead come down to your credit score and debt-to-income ratio (DTI). Having a credit score of at least 650 can help so that your interest rates are lower when you’re paying back the loan.

Assuming your credit score is high enough to qualify, the first step to getting a personal loan is getting preapproved with a potential lender. This can involve a soft credit check, and will tell you what rates and terms you qualify for. After comparing different lenders, you’ll submit an application along with the necessary documentation for your personal information and income. If you’re approved for the loan, you may receive your funds within a day to a week of your approval.

Rocket Loans® offers same-day financing, and personal loan borrowers may receive their money the same day they apply.

Ask About In-House Financing

Depending on where you buy your appliances, you may be able to ask about in-house financing. This usually comes in the form of an in-store credit card that you can charge purchases to and pay back over time, but only from that specific retailer. You can often receive sign-up bonuses with in-house financing, such as a no-interest repayment period. Qualifying for in-store financing requires a credit check and a credit score between 580 and 649.

You can usually sign up for these cards at the store’s checkout counter or online. However, since this financing is only valid for a single retailer, your shopping will be limited to that store’s pricing. Additionally, once an interest-free period ends, you’ll be charged the full interest rates with your payments.

Rent To Own

Some retailers may offer a leasing option, where you can take a product home and make weekly or monthly payments in exchange for using the appliance. If you stop making payments, you must return the appliance, and are typically free to do so at any time. After a certain amount of time, if you keep making payments, you’ll eventually own the appliance outright, usually after 12 to 24 months.

Applying for a rent-to-own agreement requires no credit check, but you’ll have to share some personal information and possibly references – this can vary from store to store. The downside to leasing an appliance 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, that can be an option to pay for an appliance you need. Interest rates with cards are known to be high, though, but you can sign up for a new card with a 0% APR period. These promotional periods allow you to repay the loan interest-free for a period of time, typically 12 – 18 months. If the appliance isn’t paid in full during that window, though, you can be hit with high interest rates, and possibly go into further debt.

FAQs About Appliance Financing

You may still have some questions after reviewing your options. Below are some common questions asked regarding appliance financing.

Will appliance financing hurt my credit?

Financing like personal loans requires a hard inquiry, which can affect your credit, depending on the loan amount. Otherwise, if you make your payments on time and use your financing option smartly, your credit shouldn’t be negatively affected any further.

Can I finance appliances with no credit check?

Rent-to-own financing typically doesn’t require a credit check, only your personal information like your name, address, income data and housing status. Some retailers may request you supply one or more personal references in order to qualify.

Can I get financing on appliances if I have bad credit?

In-house financing has lower credit score requirements than your typical credit card – a score between 580 and 649 is acceptable – but again, you can only use this financing in that particular store. Take steps to improve your credit score and you may be able to consider even more financing options. 

Final Thoughts

Purchasing new home appliances can be expensive, but it’s often necessary. With different appliance financing options available, you can decide for yourself which one would suit you and your current financial situation best.

If you think a personal loan will work well for you, you can get started today with a preapproval 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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Hanna Kielar

Hanna Kielar is an Associate Section Editor for Rocket Mortgage focused on personal finance, recruiting and personal loans. She has a B.A. in Professional Writing from Michigan State University.