How to Finance a Refrigerator

If you notice your fridge isn’t cooling quickly or maintaining the proper temperature, it’s important to take action. Cold temperatures slow bacterial growth and keep you from getting sick. But big kitchen appliances can be pricey and not everyone is prepared to drop that much money on an unexpected expense. Read on to learn about financing options and what to do if you have poor credit. 

If you need funds to buy a refrigerator, MoneyLion offers a service to help you find personal loan offers. Based on the information you provide, you can get matched with offers for up to $50,000 from our top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you.

6 Options for financing a refrigerator

If you can’t afford a new refrigerator but you need a new one right away, try a financing plan. Some sellers will let you pay for them monthly, but you can also get a loan. 

1. Personal loans

Getting a personal loan is one option for many people looking to finance a refrigerator. They have fixed monthly payments so you know what to expect, but can also be paid off quickly if you have the money. However, the application process can take time. You’ll need to gather certain information, like your employment status and annual income.

Not all lenders will require a credit check, but those that don’t often come with higher interest rates or have to be repaid relatively quickly. If you have to undergo a credit check, you’ll likely need a score of 580 or higher. 

Pros

• The process generally is straightforward and simple.
• It’s possible to get a personal loan even if you have bad credit.
• The payments due each month are the same, so you know what to expect.

Cons

• You have to go through an application process, which may take time.
• If you have poor credit, you may wind up with a higher interest rate.
• If you aren’t careful, you could end up with more debt than you can handle.

2. In-store financing

If you’re buying your fridge directly from a home improvement store or any other retailer, you may be able to sign up for a financing plan directly through the seller. Store credit cards associated directly with different businesses are an example of this. 

You may also apply directly at checkout for third-party financing. This type of financing is offered by another provider like Affirm, which offers buy now, pay later services. Promotional deals may also offer an especially low annual percentage rate (APR) for the first year.

Pros

• They often come with deals and promotions that could save you money.
• In-store credit cards can help improve your credit.
• Predictable payments that are the same each month unless your APR changes after a promotional period

Cons

• You may need credit approval and may wind up with a high APR.
• You may need to front a down payment. 
• Store credit cards can only be used at those specific retailers.

3. Credit cards

Paying with a credit card is a simple financing option that many people already have access to. If you are looking to open a new line of credit, you can often do so the same day you start the process. Although you can get a credit card even if your score is very poor, such as 500 or so, you will likely face a higher interest rate than someone with a better credit score. 

Some companies will let you get a card no matter your credit score, with the caveat that you’ll have to pay extra in fees and interest.

Pros

• Cards let you purchase now and worry about payments later.
• Making on-time payments can help raise your credit score.
• Getting a new credit card could give you a promotional APR with lower interest rates.

Cons

• Making a big purchase will eat into your credit limit, affecting what you have available to spend on other things.
• You could pay a high-interest rate if your credit isn’t great.
• You’ll wind up paying more over time due to interest if you only meet the minimum payment each month. 

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PRO TIP! Explore credit and debit card options tailored to different needs and preferences.

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4. Cash advance apps

Cash advance apps let you access a certain amount of money from your future pay, sometimes with no credit check. For example, Moneylion’s Instacash^SM lets you get your money with no fee or interest. If you are looking for cash within minutes, there is a Turbo fee to expedite. It’s not a loan product and you’re essentially getting a portion of your paycheck early. 

Pros

• Cash advances let you get money quickly.
• You often don’t need a credit check.
• You can do this online.

Cons

• Some cash advances charge higher interest rates.
• They typically have to be paid back quickly.
• These are typically best for emergencies.

5. Rent-to-own 

Renting to own means you’ll make payments weekly or monthly on an appliance either to keep it for a short length of time or to pay it off entirely and own it outright. This is different from leasing, which usually requires a credit check and is for new items that you may or may not intend to purchase outright by the end of the contract. 

Although you don’t need a credit check to rent-to-own, you’ll still have to go through an application process to prove you have a steady income and can make at least the first payment.

Pros

• Finance a refrigerator even if you have bad credit or no credit
• Possibility of upgrading your appliance if you need to while renting
• You may be able to choose how often you make payments

Cons

• Rent-to-own items may have already been used
• You need to show a steady income.
• Must prove you have money on hand to make the first payment

6. Buy now, pay later

Buy now, pay later is essentially an installment loan. You get to take home the item right away, but you break up the payments instead of putting all the money down at once. You’ll usually be able to apply for this right at checkout, paying an upfront down payment but then deferring the rest of the cost to pay off in the future.

Pros

• Usually no interest payments
• Buy now, pay later doesn’t typically require a hard credit pull.
• You can get approved quickly.

Cons

• Buy now, pay later is usually an agreement made with a third party, not with the company from which you’re purchasing your refrigerator. That means you may have difficulty getting refunds on purchases, even if it’s defective.
• This may encourage people to spend more than they can afford since the upfront payment is only part of total payments.
• You may have to pay a fee.

How to choose the right financing

Not everyone’s financial situation or even day-to-day life is the same. Reflect on your own finances and research the different financing options available before committing to purchasing your refrigerator. 

Determine your budget

The first thing you should do is figure out what your budget is. Determine how much you can pay upfront and how much you can afford month-to-month without stretching yourself thin and risk missing payments. 

Consider your credit score

You should also take a look at your credit score. If it’s good, you may be able to get a reasonably low-interest rate. If it’s bad, however, you could be pressured to turn to a lender that will look past your poor score if you simply pay them a much higher APR. If you’re in that boat, you may want to seek out something that offers a deal or promotion for first-time users.

Compare interest rates

Even within the same type of loans or credit options, you’ll find some variance in interest rates offered by different companies. Shop around between banks and sellers to see who can offer you the best rate.

Check the repayment terms

The terms of repayment will affect how much is coming out of your pocket each month. Some loans have to be repaid extremely quickly, which can be difficult for some families. Some require collateral that you might not be willing to risk. Assess repayment terms with different financing options before committing to one.

Consider promotional offers

Remember that many new clients will get to spend some time with discounted services. That could be a chunk of money taken off the front end of the bill or a promotional interest rate with a delayed start. This could be a great option as you try to finance your new refrigerator.

Financing Your Fridge

When it’s time to buy a new refrigerator, you’ll find plenty of ways to help you get it into your home without having to pay for everything upfront. Research and decide what financing option would work best for you before making such a big purchase.

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