5 Ways to Pay For Furniture Without Taking Out a Loan

 

In furniture finance, furniture is bought based on a credit contract in which furniture is bought and later paid for by installment payments. In these arrangements, furniture financing companies provide furniture to customers who pay the furniture off over time to the furniture financing company.

In today's economy, taking out a loan to buy furniture can be potentially risky since it can lead to loss of property or bankruptcy if the borrower fails to make monthly payments. So what are ways that people can still purchase furniture without going into debt? Here are five options:

1) Get a gift card from a major retailer.

2) Use your home equity line of credit (HELOC).

3) Rent / borrow from friends or family members. 4) Buy furniture that is on sale. 5) Buy furniture in installments (furniture financing).

1) Get a gift card from a major retailer

If you're not picky about the furniture you want, furniture retailers like Pier 1 and Crate & Barrel offer gift cards. Not only do they save you money by offering discounts or promotions (i.e., coupons) but they give customers flexibility because the furniture purchased with these gift cards can be returned at any time if it doesn't fit your needs/the room where you plan to put it in. Most stores also allow furniture purchased with their gift cards to be taken home immediately after purchase so there's no waiting for an order to arrive before starting to use your new furniture!

2) Use your home equity line of credit (HELOC)

Do you have furniture that can serve as collateral for a HELOC? If you do, then furniture financing from an outside furniture financing company is not necessary. You can get a furniture loan from the bank or financial institution that holds your mortgage. In essence, the furniture you already own becomes your down payment and serves as collateral for your furniture loan. If you're denied a furniture loan because of poor credit or lack of funds, try going to a furniture store instead and purchase furniture using their in-house credit card. Interest rates are generally lower if you use a store's in-house credit card versus going through a third party furniture finance company especially when you consider there's no furniture down payment required.

3) Rent / borrow from friends or family members

How many times have you heard your parents, grandparents or other older relatives talk about furniture they had to throw away because it just wasn't worth repairing? If you're lucky enough to have furniture in your home that can be passed on through multiple generations—antique furniture for example—consider asking your parents or an elderly relative if they'd consider lending it to you so you can use it while the furniture is still in good condition. It might not be ideal furniture since most of us would want new furniture but it's better than having nothing at all especially when there are no other options available. You also want to avoid buying inexpensive furniture that won't last and will need to be replaced every few years.

4) Buy furniture that is on sale

If you're already working with a tight furniture budget, the best way to purchase furniture without taking out a loan is by finding furniture sales and discounts at furniture stores near your home. Check furniture store websites often so you can keep track of upcoming furniture sales. Another option is to sign up for email alerts from top furniture brands like Coaster, Innovations Living, Lane Venture, Powell & Bonnell, Signature Design by Ashley and more. Take advantage of any introductory offers or limited time offers featured on these sites or on furniture store websites since they'll save you money in the long run! 5) Buy furniture in installments (furniture financing).

If furniture is on your list of furniture priorities this year but you don't have the furniture budget to cover all the furniture items you want, furniture financing may be an option worth considering. And if you're on a tight budget, furniture installment plans are especially helpful since they let you make monthly payments instead of having to pay for everything upfront which can sometimes be impossible to do. You can use furniture financing from furniture stores or furniture finance companies that allow customers to take home their furniture right away—no waiting necessary! Plus there are special promotions being offered by some retailers offering zero percent interest if paid in full within 12 months. If approved for a very low credit score, subprime lenders will lend up to 70 percent of an furniture item's cost making furniture financing available to more furniture shoppers. 

 However, furniture financing interest rates can be up to 36 percent which means you have to pay a lot of money in interest over the furniture loan period which could run from one year to three years. Compare furniture finance rates being offered by furniture stores with your best alternative options before accepting an offer since not all furniture finance offers are created equal. You may also want to consider consolidating other monthly obligations into this furniture loan if there's no way you can pay for the furniture in full right away so you can avoid paying high interest rates altogether.

Once these steps are taken, your new furniture is one step closer to being yours!