Great furniture turns your house into a home, whether it’s a matching dining room set, a comfy new bed, or a couch that can fit the whole family. But it’s tough to save thousands of dollars for a brand-new furniture set that matches your tastes and home.

Instead, you may want to consider financing it — and you have plenty of options. Some are cheaper but require more work on your part. Others are more convenient, but you may pay more in interest rates and fees. This article will cover four furniture financing options to consider in 2023.

1. Installment loan

Installment loans are typically larger lump sums of money you can borrow at a fixed interest rate. After you get the loan, you repay it with fixed monthly payments of principal and interest. This payment predictability and large borrowing amounts make it easy to purchase furniture and budget for the loan repayment.

You can get installment loans through banks, credit unions, and online lenders. These days, some lenders have less strict credit score requirements, using additional factors like income and employment status to make lending decisions. This can help poor-credit borrowers purchase the furniture they need. And if you want higher approval chances or lower interest rates, you can consider getting a secured installment loan and using the furniture as collateral.

2. Layaway

Layaway involves placing a deposit on a piece of furniture so the store can hold it for you. Then, you can pay for it over time in installments on a payment plan with the store.  Only after you finish paying for the furniture do you get to take possession of it.

This method can work well if you don’t need the new furniture right away. For example, if you need to replace furniture or move but plan the purchase ahead of time, you can use layaway to afford the furniture.

3. In-store financing

In-store financing involves paying for the furniture over time with monthly payments plus interest. This may be in the form of a loan or a promotional 0% APR credit card that charges no interest if you pay the full amount in a specified timeframe. Unlike layaway, you get the furniture right away, but you have to pay interest. As for this method vs. installment loans, in-store financing tends to cost more in interest, unless you take advantage of a 0% interest period and pay in full, but it can be easier to get.

4. Rent-to-own

Rent-to-own agreements let you use the furniture in exchange for installment payments. Like in-store financing, these tend to be more expensive, but you don’t even own the furniture. However, the store often provides free delivery, setup, and repair services. Therefore, rent-to-own might work if you need to test the furniture in your home before buying and can’t afford to pay full price up front.

The bottom line

Whether you’re moving into your first home and getting brand-new furniture or replacing that decades-old sofa, you’ve got plenty of options for financing the purchases. Installment loans can work great if you want predictable payments and you’re willing to shop around. If you want to keep costs as low as possible and can wait on the furniture, layaway might be a better choice.

If you need furniture now and can afford the interest, in-store financing might be a great option since you don’t need to shop for financing methods. Finally, rent-to-own is good for similar reasons but removes the stress of deciding if you want the furniture right then and there.

Make sure you weigh the pros and cons of each method against your situation. Doing so will help you get the furniture you want without breaking your budget.

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