Furniture Loans

Building a home is always very stressful because you want to prepare a place where you feel comfortable and secure. 

However, the funds aren’t always so readily available, and that’s where furniture loans come in. Keep on reading to learn how you can maximise the feeling of comfort in your house without breaking the bank.

What Are Furniture Loans?

A furniture loan is different types of loans in Australia that you can use to renovate your house, replace and fix old furniture, or decorate from scratch. These loans are more easily granted, though they typically have higher interest rates as their terms are more flexible.

What Are the Terms of Furniture Loans?

Naturally, the terms differ from one lender to another, but typically, the ones that offer shorter terms (6 to 12 months) will require no minimum amount and have higher interest rates. 

Travel loans bad credit with longer terms, like 18 months, will probably require a purchase amount of around a thousand dollars, and it could be available for only online or in-store purchases.

Some loans come with 60-month or 72-month terms, but they have higher minimum purchase amounts, while longer terms are only available for select items.

Advantages of a Furniture Loan

If you’re wondering what exactly you’ll be getting with a furniture equipment loan credit score, here are the top pros:

Building Good Credit

furniture loans

Apart from readying up your home to be a cosy space that fits your style and needs, furniture loans can also help you build good credit if you get them from a credible source and pay back the no credit check Christmas loan without missing any due dates.

Granted to Borrowers with Poor Credit Scores

Although this is a little risky, it’s always a huge advantage if a place offers Christmas loans for unemployed to people with subpar credit scores, as this gives you the chance to afford the products or services you need and  fix up your credit score.

Still, the risk that you’re dealing with a travel loan shark that’s hoping your poor credit means you won’t be able to pay the loan back on time and have crazy interest rates imposed on you is never out of the question. 

Always read the terms very well, ask about late fees, and make sure you have a solid plan of how you’ll pay the loan back.

Disadvantages of a Furniture Loan

I wouldn’t say the following things are disadvantages as much as they are warning signs, so beware if you notice any of the following in the contract:

0% Financing

furniture loans good credit

0% financing means that you’re given the funds of a certain amount (based on your credit score), and you’re given a certain term or duration to pay the loan back in full. In the case that you default or that you’re unable to pay the amount back, the equivalent interest that you would have normally paid is added to the amount you owe.

So, if you’re not 100% certain that you’ll have the amount of money needed to pay the loan back by the end of the term, steer clear of 0% financing options.

Consumer Loans

furniture loans bad credit

As the name implies, these funeral loans low interest rate are directed at people who are in the habit of consuming, which can lead to some subpar credit scores and a credit history that isn’t the most appealing to give a student computer loan to.

These options are risky because they impose higher interest rates than average, and borrowing from them too often can cause damage to your credit history.

3. Revolving Credit Account

A revolving credit account may drastically lower your credit score and mess with your debt-to-credit ratio. This is because it allows you to use the credit repeatedly up to a certain limit as long as the account is open, which can encourage you to spend more without calculating your expenses first.

What Are Alternatives to Finance Furniture

If you don’t want to rely on a furniture loan to be able to finance your furniture, here are some viable alternatives:

In-store Financing

A lot of furniture stores do realise that not everyone has the money needed to pay for all the pieces upfront, and that’s why they offer store credit to customers. 

However, it’s super important to be sure that you can pay the monthly bill regularly and on time in order not to suffer from the incredibly high interest rates imposed on late payments.

Credit Card

If you’re not the type of person that relies on credit spending consistently, you might want to consider paying for the furniture using your credit card. This way, you won’t have a problem with the reduced amount of available credit and consequently won’t have to increase your credit use, which lowers your credit score.

Naturally, however, you’ll have to pay more money for the same amount/models of furniture, in the long run, using a credit card due to the interest rate imposed on them.

A Loan for Home Improvement

loan for home improvment

You can borrow up to $5,000 if you opt for a home improvement consumer loan, which is a good amount of money to buy furniture for your heart’s desire. And the best part is that these come with low, fixed interest rates, which make them a lot more accessible and affordable than credit cards in the long run.

Renting to Proprietorship 

Another excellent route to take would be renting the furniture you need instead of getting vet bill loans. Stores that allow this will send you the furniture and agree to receive instalments from you over a certain period of time. 

The biggest advantage to this is that you can send the furniture back at any time without getting a penalty imposed on you. However, if you default or fail to pay the loan by the end of the term, the store will reclaim possession of your furniture.

5. In-store Layaway

A layaway plan is granted with no finance fees, but either a one-time fee can be charged upfront or a percentage of the price before repayments begin. The risk in this choice is that you’ll have to keep paying for the higher price in the case that the item goes on sale.

If you change your mind about the item, you’ll have to pay a cancellation fee. Also, this option limits your choices, just like the previous one does as well.

Final Thoughts

Getting the furniture that suits your taste and makes you feel like your house is a home is definitely within means if you use a furniture loan or cosmetic surgery loans or even one of the alternatives. 

However, the most important advice is to stay within the budget to make the repayment in full and on time.

About the Author

Lucy has over a decade of experience in finance. She is currently the content curator here at Perfect Payday.

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