Whether you’re looking to buy a new refrigerator, a washer and dryer set, or a new stove, there’s no doubt that investing in new appliances can be an expensive affair. You might want to consider financing for them. Fortunately, there are plenty of options for appliance financing. You just have to find the best one for you. 

Modern appliances can be quite pricey, especially if you want the latest models — with all the bells and whistles. If you’re a homeowner on a budget, it can make your financial situation go awry. 

That’s when appliance financing comes to your aid — making it easy for you to purchase new amenities and gadgets for your home. But what is appliance financing, and is it really a good deal for homeowners contemplating appliance purchase?

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What is appliance financing?

An appliance financing or an appliance loan is a type of financial arrangement that gives you the convenience of purchasing a refrigerator, dishwasher, or a similar appliance and paying for it over time, not all at once.

So, if you can’t wait to save up enough cash to buy a new appliance, it’s best to consider a financing option that works best for your money. For instance, an unsecured personal loan will help you buy your appliances through a simple loan approval process — provided you have a strong credit score. You also have the option of paying for your appliances through a credit card that offers you zero interest.

Can you finance appliances with no credit check? Yes. There are also options such as in-house financing for borrowers who have bad credit or no credit history. You may qualify for a line of credit — even getting a low-interest rate if you choose well.

No matter how you decide to finance your appliance purchase or how small your purchase amount, just ensure that you minimize the debt period or loan term. That’s because interest charges can add up quickly and monthly payments will undoubtedly reduce your cash flow-limiting your ability to save money.

Read more: HVAC Financing For Good & Bad Credit

Why get a personal loan for appliances?

New appliances can cost a lot — ranging from a few hundred to several thousand dollars depending on the type of appliance, its model, and features. Generally, refrigerators are the most expensive home appliance while clothes dryers are the least expensive appliances.

Depending on the appliance quality and the number of features, the costs of appliances can vary. Here’s a general look at some popular appliance costs:

  • Dishwasher: $400 to $700
  • Washer: $350 to $1,000
  • Dryer: $400 to $1,000
  • Oven: $650 to $2,000
  • Refrigerator: $900 to $8,000

The good thing about personal loans is that they can be used for pretty much anything, even appliance financing. Such a loan payment option offers you fixed payments and a defined repayment timeline. 

Although getting a personal loan for buying appliances is a personal choice, it’s a wise decision. Just make sure that you think it through and consider your current budget. You need to assess your financial situation and find your reasons for getting a personal loan. Can you afford to pay the extra monthly installment? Is the appliance you’re planning to buy absolutely essential? Is financing a good idea for you?

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What appliances can you use a personal loan for?

While a personal loan can be used for just about any home appliance, some loan lenders require you to inform them about what you plan to do with the money. As long as you’ve borrowed the money for a responsible and legal reason, you can finance any appliance you want. 

If you’re specifically looking for washer and dryer financing or refrigerator financing, the options are plenty. You’ll be surprised to know that there are many financial lenders offering personal loans specifically for appliances apart from financing a medical emergency, a home improvement project, or giving a student loan. 

In case you’re opting for refurbished or used appliances, make sure you buy them from reputable bricks and mortar stores, and the appliances come with a proper warranty.

Guide created by Gene May Heating & Cooling

Lease to own appliances — is this a good idea?

This type of financial solution is great for those who want to enjoy an appliance and understand its technology before buying it upfront. Typically, the loan approval and loan application process is easier with no credit needed, just details of your employment and banking history.

Best appliance financing options

Appliance Financing Features
Personal loan– Unsecured debt. Can be used for almost any purpose
– Not backed by a collateral — unlike secured loans
– Loan eligibility, as well as loan interest rates, are dependent on income and credit score
– You’ll need to provide documentation, such as pay stubs or your tax return, to verify your income
– On approval, funding takes one business day to over a week
0% APR credit card– A line of credit with a set borrowing or credit limit
– Monthly payments against your principal balance and interest
– Higher APR than a personal loan
– Usually a promotional 0% APR period (12 to 21 months) for borrowers with strong credit
– Helps you to make appliance purchases and repay your debt without fees
In-house financing– Helps you charge your purchases and pay them off over time
– Breaks up big purchases into more manageable, monthly payments
– Ideal for those who shop for appliances at a store 
Rent to own– Ideal for those who need to finance their appliances without a credit check or down payment
– Comes with the flexibility of returning the appliances at any time
– Leasing agreement lets you take home the appliance but pay for it through weekly or monthly payments
– Lets you eventually own the item on complete payment
– High fees 

Is buy-now-pay-later appliances a good idea?

As the name suggests, this financing plan lets you buy the appliance now and you get billed for it later. If you use this financial option sensibly and make your repayments on schedule, it shouldn’t negatively affect your credit score.

Read more: How to Get Bad Credit Mortgage Loans

In-store appliance financing options — what’s the average interest rate and cost?

Retailers typically offer 0% financing on appliances if the amount is paid in full in a specified span of time, usually 18 or 24 months. If they are unable to pay for the appliance at that time, the interest rates can go from 8% to 30%, with an average interest rate of 22%. And, if you have bad credit, the interest rates go even higher.

Pros and cons of appliance financing

Here’s a comparison of some pros and cons of appliance financing.

Pros Cons
Allows you to purchase a new gadget without paying for it upfrontApplying for appliance financing can lower your credit score
Helps you improve your credit report if you make payments on timeHigh-interest rates — especially if you miss a payment
A good financing option if you get 0% interest rates Gives you an additional bill to pay each month

Read more: How Long Does It Take To Improve Your Credit Score

Last thoughts

No one plans on their washer/dryer breaking or the hot water heater suddenly conking off in the middle of a severe winter season. That means that you need to be ready mentally and financially for an expensive replacement. But, if you are not, you can always make use of the best appliance financing options.  

If you’re planning to buy a new TV to replace the one in your living room or want to buy the latest model of a dishwasher — appliance financing will again come to your aid. Instead of strolling down to the store of your choice and plopping down your credit card, you must weigh all your financing options.

Keep in mind that if you follow a disciplined repayment schedule, financing new appliances can actually help you improve your credit score.

Read more: Signs appliances are malfunctioning

Best Appliance Financing: How to Finance Washer, Dryer & More was last modified: August 18th, 2022 by Ramona Sinha
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