Your Guide to Furniture Financing for Bad Credit
Buying your home or moving to a new apartment is joyful but expensive. And what if, at the most inopportune moment, the old furniture decides to “retire” – the sofa breaks or the cabinet cracks under the weight or the passage of time? In such cases, it is not always possible to cover all expenses from personal savings. If you don’t want to delay your comfort, a furniture loan will help you quickly update the interior and avoid the hassle of living with old or broken furniture.
People usually turn to a bank for a loan. But what if the bank decides you are too risky a borrower due to a bad credit history and refuses your application? Do not worry in advance — today, there are many other ways of guaranteed furniture financing where the credit history is not evaluated so strictly. The main thing is to find the right option for you, and in this article, we’ll help you choose the best furniture financing solution for your needs.
Table of Contents
- Why is it Difficult to Find Furniture Financing With Bad Credit?
- How to Get Furniture with Bad Credit?
- How to Improve Your Chances of Approval?
- What to Watch Out For
- Alternative Financing Options
- Conclusion
- FAQ
Why is it Difficult to Find Furniture Financing With Bad Credit?
Bad credit is comparable to a bad reputation in the financial world. If you haven’t always paid your bills on time, missed payments, or taken out a lot of loans, your financial habits will be reflected in your credit report. Lenders look at it to see how reliable you are. They may doubt your ability to pay back the money if they see these negative marks.
Here’s how bad credit affects getting loans for furniture:
Higher interest rates. This is a penalty for the risks lenders take when you borrow money. This means you’ll have to pay more in the end. Stricter requirements. Lenders may require additional documents or a larger down payment. Fewer options. With a bad credit history, your financing options may become limited. Most banks may simply turn you down.
But don’t despair! Bad credit doesn’t mean you don’t have a chance. It just means you need to think a little more and be more creative to find solutions.
How to Get Furniture with Bad Credit?
Even with a poor credit history, you don’t have to give up on buying new furniture. There are different ways to no credit check furniture financing:
In-Store Financing
Stores like Best Buy, Walmart, and Ashley Furniture offer installment plans with monthly payments for furniture with no credit check. You get the furniture, and the amount is divided into equal payments that must be made over a certain period. For example, Ashley Furniture has a program that allows you to pay off the purchase price over 12 months. This makes the payments more affordable and helps you avoid financial hardship.
For those with less than stellar credit, it can be a great way to buy the furniture you need and improve your credit by paying off the loan on time. However, it’s important to be careful. Some offers, such as ‘0% for 12 months,’ may be tempting, but it’s important to consider the terms of the agreement. If you miss a payment or don’t pay the entire amount on time, interest may be added retroactively. This could result in your purchase costing significantly more than you planned.
Pros:
Immediate Ownership: Take your furniture home right away, even if you can’t pay in full. Monthly Payments: Spread the cost into smaller, more affordable payments. 0% Interest Offers: Many stores offer no-interest deals if you pay within a set time. Build Credit: Paying on time can improve your credit score. Accessible for Bad Credit: Many stores offer options for people with lower credit scores.
Cons:
High Interest Later: If you don’t pay off the balance in time, high interest may apply — sometimes 20% or more — retroactively to the entire purchase. Higher Total Cost: Missed payments or interest can make the furniture more expensive. Credit Checks: Your credit score might affect the financing terms you get. Risk to Credit Score: Missing payments can damage your credit. Hidden Fees: Some plans have mandatory initiation fees or commissions.
Rent-to-Own
Rent-to-own is a simple and flexible way to get furniture without a loan. You might consider it a way to finance bedroom furniture without a credit check. You take the bed or wardrobe home and then make regular payments, usually weekly or monthly, over a set period. Unlike traditional financing, you don’t fully own the furniture until you’ve made all the payments.
If you can’t keep making payments or no longer need the furniture, you return it without incurring major penalties, although payments already made cannot be refunded. People with poor credit choose this method because a credit check is usually unnecessary, and the terms are flexible.
Pros:
No Credit Check: You can qualify without a credit check, making it easier for people with bad credit. Instant Use: You get to take the furniture home and use it immediately without paying the full price upfront. Flexible Payments: You can pay weekly or monthly, which helps fit payments into your budget. Return Option: If you can’t continue paying, you can return the furniture without penalty. Own It After Payments: The furniture is yours without extra loans once all payments are made.
Cons:
Costs More: You usually pay more than the original price because of added fees. Frequent Payments: Payments are often weekly, which can feel tighter than monthly ones. No Ownership Until Last Payment: If you miss payments, you could lose the furniture and what you’ve already paid. Limited Choices: Rent-to-own stores might have fewer options than regular furniture stores.
Personal Loans from Direct Lenders
Getting a personal loan with bad credit can be difficult, especially with banks where your credit score is important. But, some direct lenders are willing to lend money to finance furniture with no credit check. They use a soft credit check that will not affect your score. They focus more on your income than your past credit mistakes.
Personal loans for people with bad credit are typically available for up to $5,000 and must be repaid in 2-24 months. Interest rates on such loans are higher because lenders take a greater risk by lending money to borrowers with low scores.
The easiest way to find such lenders is online, but be careful: you may fall for scammers or lenders with predatory lending practices. To avoid making a mistake, it is better to contact 15M Finance, where you will get clear and honest loan terms.
The loan application process is usually very simple: you submit an online application with minimal documentation and receive a decision within 15 minutes. However, it is important to read the terms of the agreement carefully and take out a loan only when you are sure that you can repay it on time.
Pros:
Flexible Use: You can use the money on any furniture you want without being tied to a specific store or brand. Fixed Payments: The monthly payments are the same, making it easy to budget. No Collateral Required: Most personal loans don’t require you to put up assets like your home. Fast Funds: Once approved, you get the money quickly to buy furniture right away. No Credit Check: A soft credit check does not lower your credit score when you apply.
Cons:
High Interest Rates: Personal loans from direct lenders often have higher interest rates, especially if you have poor credit. Credit Damage: Your score will drop if you miss payments or default on your loan. Limited Loan Amounts: Depending on the lender and your credit score, you may not be approved for the full amount needed to buy expensive furniture.
Credit Cards for Bad Credit
These cards let you spread out payments, which is beneficial for bigger purchases. While they often come with higher interest rates and lower credit limits, they provide access to credit when needed.
One option is a secured credit card, which requires you to make a deposit that matches your credit limit. For example, a $1,300 deposit gives you a $1,300 limit. This deposit helps you get approved even with bad credit.
Another option is an unsecured card, which doesn’t require a deposit but may have higher fees and interest. Be sure to review the terms before applying.
Some credit cards offer a 0% interest period for a limited time. If you plan to buy furniture and can pay off the balance within 6 to 12 months, this can be a great way to avoid extra costs. Just be aware that interest will increase after the 0% period ends, so it’s best to pay off the balance before then.
Keep an eye on your credit limit, as cards for bad credit usually start with lower limits. Responsible use, such as making on-time payments, may increase your credit limit. This not only helps with future purchases but also improves your credit score. Making regular payments on time shows lenders you can manage credit well, leading to better financial options in the future.
Pros:
Buy Now: You can buy furniture and gradually pay off the debt. Build Credit: You can improve your credit score by making timely payments. Flexible Payments: You can choose how much to pay monthly if you make the minimum payment. 0% Interest Rate Offers: The grace period allows you to use the money without having to pay for it. The main thing is to pay off the debt before it expires. No Collateral: Unsecured credit cards do not require a deposit, allowing you to access credit without having to put down money.
Cons:
Higher Interest Rates: Credit cards for borrowers with poor credit ratings usually have elevated interest rates, making them costly unless you pay off the balance quickly. Lower Credit Limits: Bad credit often results in reduced limits, making it difficult to purchase expensive furniture. Risk of Overspending: Without careful budgeting, it is easy to overspend and end up with large balances. Impact on Credit Score: Missed payments can further damage your credit score, making it even more difficult to get a loan in the future.
How to Improve Your Chances of Approval?
Getting approved for furniture financing with bad credit can be easier if you take a few simple steps before applying. Even small moves can help improve your credit score and make you look better to lenders:
Pay off existing debts
Try to settle your current debts as quickly as possible, especially if there are no penalties for early repayment. This will increase your credibility with the lender, showing them that you can manage your debts.
Check your credit report
Derogatory marks can appear on your credit report by mistake. Errors such as incorrect balances, missed payments, or bills you do not owe negatively affect your credit score. Report them to the credit bureau immediately and have them corrected.
Pay your bills on time
Do not miss payments on other loans and utility bills. This shows up in the credit report and demonstrates you as a responsible borrower.
Apply for a smaller amount
Take your time when requesting a large amount, as you are likely to face rejection. Instead, apply for a smaller loan. This approach reduces the lender’s risk, boosts your chances of approval, and makes repayment easier.
Keep your credit card balances low
Use as little credit as possible if you have credit cards, as high usage can negatively impact your score. It’s best to keep your balance below 30% of your credit limit, which will increase your chances of being approved for a loan.
Become a co-signer
Ask a close friend or family member with good credit to cosign the loan. This strategy boosts your chances of approval since the co-signer’s credit score is also taken into account.
What to Watch Out For
When looking for furniture financing with bad credit, it is important to be especially careful not to fall into the trap of scammers or unscrupulous lenders. Here are some tips on how to avoid predatory loan offers:
Beware of ‘Too Good’ Offers
Unscrupulous lenders take advantage of borrowers with bad credit and often offer “cheap furniture financing,” “guaranteed approval,” and “money in 1 minute.” High interest rates and hidden fees usually back these offers. So, if the offer seems too good to be true, it most likely is.
Read the Fine Print
Carefully study all the terms: interest rates, late fees, and additional fees. If something is unclear, clarify it, and do not be afraid to ask questions. Do not sign the contract until you are sure that you understand the terms and will be able to repay the loan on time.
Beware of Advance Payments
If a lender requests a fee, such as one for quick approval, consider this a warning sign. Reliable lenders do not require borrowers to pay anything to speed up the process or to pre-apply. Do not give such companies your personal and financial data, which can lead to fraud and identity theft.
Avoid Pressure
If the lender urges you to act quickly, this is a sign of fraud. Trusted lenders give you time to study the loan agreement and decide, while scammers force you to act hastily so that you do not have time to think and assess all the risks. Do not rush to sign documents. Carefully read the terms and, if necessary, consult with financial experts.
Check the Lender’s Reputation
Before taking out a loan, read reviews about the lender. Make sure that the lender has all the necessary permits to operate. Legal companies are always registered; this information can be easily found on their website or in open registries. Search for information on the Internet, read what other borrowers say, and make sure that the company has no complaints about fraudulent activities. And to avoid wasting time looking for a lender, it is better to contact 15M Finance.
Alternative Financing Options
If you need furniture but can’t afford a loan, consider the following alternatives:
Buy Used Furniture
Used furniture is a great way to save money. You can find quality pieces at thrift stores or online platforms like Facebook Marketplace and eBay. You can often buy furniture that looks almost new but costs much less. Plus, buying used furniture helps the environment by giving it a second life.
Borrow from Family
You can ask a family member to lend you money. This is essentially an interest-free loan. The main thing is that the relative has access to the necessary amount of money. It would also be a good idea to agree on the amount and terms of repayment. It helps to avoid quarrels with family members.
Save for Furniture
You won’t have to apply for loans if you have savings. For example, you can save up for if you don’t need furniture it urgently. To do this, determine the preliminary cost and divide that amount by the number of months you plan to save. For example, if you need a bed that costs $2,000, save $200 each month, and in 10 months, the purchase will be yours. To avoid spending your savings, open a separate savings account. This will allow you to buy furniture without paying extra interest or getting into debt.
Conclusion
A bad credit history should not be a reason to deny yourself new furniture. When exploring furniture financing, the main thing is choosing one that will allow you to make a purchase and will not leave you without money. It is important to compare offers, consider interest rates, and carefully read the terms. Take your time — in the end, it’s better to make a profitable decision than to rush into something that may not be the best choice.
FAQ
Where can I finance furniture with bad credit?
Reach out to 15M Finance. You can apply for a loan online or choose our branches near you. Just find out in advance if they are open now. We’ll ask you to fill out a simple application form and perform a soft credit check. You’ll receive your money within 24 hours.
What credit score do you need to get approved for furniture financing?
It is ideal to have a credit score of at least 580. However, some furniture store lenders finance people with worse credit. Lower scores can lead to high interest rates and strict repayment terms.
Can furniture financing help improve my credit score?
If you are talking about a personal loan or credit card used to purchase furniture, then yes. Making regular, timely payments will show lenders that you can manage credit responsibly, which will positively impact your credit score in the future.
See also:
- What are Home Improvement Loans? – https://15mfinance.com/blog/home-improvement-loans-with-bad-credit/
- Different Types of Loans – https://15mfinance.com/blog/types-of-loans/
- What is a Pledge Loan? – https://15mfinance.com/blog/what-is-a-pledge-loan/
References:
- How to Finance Furniture – https://www.businessinsider.com/personal-finance/personal-loans/furniture-financing
- The Dos and Don’ts of Furniture Financing – https://www.grandfurniture.com/blog/buyers_guide_the_dos_and_dont_of_furniture_financing
- Disputing Errors on Your Credit Reports – https://consumer.ftc.gov/articles/disputing-errors-your-credit-reports
