4 Ways to Finance Your Furniture

New furniture can cost a lot of money, whether moving into your first home or replacing some older pieces. If you need it now and don’t have time to save, you have options. Financing the furniture with a loan or credit card lets you spread the cost over many months so you can fit furniture into your budget. This article explores four ways to finance your furniture so you can get the pieces you need for your home. 1. In-store financing In-store financing, also called retail financing, refers to any financing options the furniture retailer offers you directly. These may be either installment loans or credit cards. Furthermore, some stores may offer lease-to-own programs for those with lower credit to help them get the furniture they need when they need it—though these can sometimes be expensive programs. This involves making payments on the furniture without owning it until you pay it off, at which point you become the owner. Some of these programs require no down payment.  In-store financing tends to come with higher interest rates than other forms of financing, and promotional offers may help offset this. For example, in-store financing options may offer 0% interest for the first two years. Read the fine print on these promotions. Sometimes they include expensive terms, such as accumulating interest during the promotional period. Overall, in-store financing may be a good option if the purchase qualifies, the terms are good, and you have a solid plan for paying it off.  2. Personal loan A personal loan is a lump sum you can borrow for various personal uses, including furniture purchases. Depending on the terms, it can be repaid in regular monthly installments with a fixed interest rate. Personal loans for furniture can be unsecured, which means it requires no collateral. You may also be able to get a secured personal loan from some lenders, which means the loan is backed by a type of collateral like a car title. Compared to unsecured personal loans, these may offer lower rates, better payment terms, and easier approval. Overall, personal loans offer a predictable and flexible way to finance furniture purchases. 3. Promotional credit card offers Many credit cards provide promotional offers to encourage prospective cardholders to apply. Two of the most useful for purchasing furniture are the following: •  0% purchase APR: This allows you to spread a large purchase over a long period, usually 12 to 18 months, depending on the card, at 0% interest. You simply make the minimum payment to avoid interest. •  Sign-up bonuses: These offer a statement credit of a few hundred dollars if you spend a specified amount, such as $300 within a stated time frame, such as three months. Since furniture is a large purchase, you may reach the sign-up bonus threshold and save a few hundred dollars on your purchase.  Credit cards may offer long 0% APR periods for balance transfers as well. Therefore, you can spread out your financing even more by transferring any remaining balance on the credit card you used for the purchase to a new balance transfer card. Keep in mind that you’ll have to undergo an additional hard credit inquiry and pay a balance transfer fee worth a small percentage of the transferred balance. Plus, you’ll have to manage this process and stay on top of timelines to avoid the expenses you’re hoping to avoid. 4. Home equity financing If you have significant equity in your home, you may consider tapping into it with a home equity loan or line of credit (HELOC). Home equity loans and HELOCs use your home as collateral, unlike a secured personal loan, which may use any other item as collateral. •  Home equity loans: These are installment loans using your home as collateral, requiring fixed monthly repayments. This predictability can help you budget for the loan amount. •  HELOC: As a line of credit, a HELOC lets you borrow up to a specified amount and repay as needed. Interest rates tend to be lower than home equity loans as well. The tradeoff for lower costs and added flexibility is that you must keep track of your HELOC and how much you’ve borrowed. Home equity financing may be a good option for homeowners who want to use their home equity to create a living space they enjoy.  The bottom line Like other large purchases, you can spread the cost of furniture over time with financing. However, furniture financing comes in numerous forms. In-store financing, personal loans, promotional credit card offers, and home equity financing each offer unique benefits suiting different situations. In some cases, you may be able to combine methods to get the furniture you need. Shop for the best furniture deals first, then evaluate your financing options. This will help you furnish your home and create your dream living space.