Moving to a new house is, without a shred of doubt, costly. The expenses can increase two-fold if you are planning to furnish it as well. The global increment in timber prices has seen furniture costs reaching an all-time high. Even if you only wish to renovate your house, or buy a new sofa for your living room, the damages might get a little out of hand. What causes even greater trouble is when you’ve got bad credit. This is when you need to be more careful; because if you don’t control your expenses, your credit score will take a massive hit.
How to Finance Furniture in Canada With Bad Credit
Contrary to popular belief, buying new furniture or renovating your house doesn’t always mean that a financial disaster is on the cards. By making the right choices, you can make this more affordable. Here are a few options for you.
Personal Loan from a Bank
The first and foremost option is a personal loan from a local bank. Banks are one of the safest options when it comes to taking a personal loan. They have more competitive interest rates as compared to online lenders and the chances of getting scammed are extremely low. The biggest benefit of taking a personal loan is that you can also use the money for any other purpose, such as investment or buying any other commodity.
How It Works
You could either opt for a secured or an unsecured loan. A secured loan uses an asset, such as your house or your car as collateral. In case you fail to pay back your loan, the bank will confiscate the asset. Unsecured loans don’t require collaterals. If you don’t make your payments, the bank has the right to offset or they might sue you. To apply for a personal loan, contact your local bank, or visit the nearest bank branch to set up your account.
Few Things To Keep in Mind Before Taking a Bank Loan
One of the major problems with taking a bank loan is that they often require you to have a good credit score, typically in the range of 640-650. Even with bad credit history, you might be eligible for a personal loan, but it will affect the conditions and amount of the loan. The lower your credit score is, the higher your interest rate, plus you will be required to pay back the loan in a shorter time.
In-store Furniture Financing
Another option that you could avail of is in-store furniture financing. The biggest furniture retailers in Canada typically offer some sort of financing to their customers, even if they have bad credit. They may allow you to pay for the furniture in installments, or offer lease-to-own financing. One of the pros of this type of financing is that it’s really easy to apply for – you can avail it on the spot. Many furniture retailers also offer you a zero-interest rate, if you manage to pay back the amount in a specified time frame.
What to Lookout For
Some furniture retailers will ask you to make a down payment before taking the furniture. Many deals like this also come with a deferred interest clause. This means that if you cannot pay back the loan within the specified period, the interest rates start to pile up. The interest rates will rise fairly quickly, so it is much better to pay back the loan within the specified time period.
Here are a few furniture shops in Canada that offer in-store furniture financing
Shop Factory Direct
Shop Factory Direct is not a furniture company in itself; it is an authorized dealer for several Canadian furniture manufacturers. The company does not have any brick-and-mortar store as of now; it is exclusively online. The obvious downside to this is that you can’t visit a retail location to shop for furniture; you’ll have to send an online application.
The company offers PayPal financing, or you could take them up on the rent-to-own offer. The rent-to-own arrangement gives you up to 12 months to pay off your purchase.
Furniture Mart is one of the highly-rated furniture stores in Canada that offers both online and in-store purchases. It has retail branches in Iowa, Minnesota, and South Dakota.
The types of financing offered by Furniture Mart are:
- Payment via credit card through Wells Fargo. The credit card issued by Wells Fargo offers flexible plans for financing – from 6-72 months.
- Lease-to-own arrangement.
- Store layaway.
You can always use a personal credit card to finance your furniture. This is a safe option for you if you can clear your dues timely. A secured credit card also increases your purchasing power, allowing you to buy anything. It is perfect if you are only making small purchases. You can also earn rewards on your card, that you can later redeem for cash or vouchers.
There are several credit card companies in Canada that offer different deals. Here is a list of the top 3 credit cards that offer the best deals to buyers with a bad credit or no credit.
Total Visa Card
For buyers with bad credit, using a Total Visa Card is most likely the best option. This is an unsecured credit card with an initial credit limit of $300. Although this amount might not be enough to buy furniture for a whole house or even a room, this would come in handy for small purchases. If you are not looking to spend big, a Total Visa Card is your best bet.
Unfortunately, you won’t be getting this card without a fee. You’ll have to chip in $89 for opening your account. Apart from that, you’ll also have to pay a $75 annual fee the first year, which will become $48 in the subsequent years.
One of the major benefits of using a Total Visa Card is that the process of furniture financing is fast and efficient, and you will be provided with a response in seconds.
After the first year, you’ll also have to pay a $6.25 monthly maintenance fee. The major downside to this credit card is the interest rate – at 34.99%, it has one of the highest APR (annual percentage rate) for any credit card. If you want to avoid paying interest on your payments, clear your payment by the due date of each month.
Credit One Bank Platinum Visa
This unsecured credit card is one of the best options if you are suffering from bad credit. The Credit One Bank Platinum Visa has a lucrative rewards program, which will help you revive your credit score if you play your cards right. You will receive an initial credit limit of $300, and you will be eligible for earning 1% cashback on certain purchases.
Although the interest rates are variable, be prepared to be charged around 24% interest rate if you can’t pay off the dues on time.
The drawbacks of this credit card include a relatively high APR and a low initial credit limit. You will also be required to pay an annual fee of $75 the first year, which will increase to $99 after that.
Another viable way through which you can finance your furniture is by utilizing the rent-to-own service offered by many furniture companies. This basically means that you can rent a piece of furniture on weekly or monthly periodic payments. If you don’t have the purchasing power to buy furniture for your house outright, this can be a great option for you.
You will be offered the furniture for a specific amount of time (called the rental period), after which you can decide whether to return it or buy it outright. This is ideal for short-term use; for example if you are having guests over for a week, and you could do with an extra pair of beds.
Financial advisors usually suggest steering clear of rent-to-own or lease-to-own financing, especially if you want anything for long-term use. The primary reason is that although this offer seems alluring at first – If you rent an item for long-term, you end up paying more than the cost of furniture. Sometimes, double its original retail price, or even more.
Private Money Lenders
Several private lenders will be willing to offer you loans at a low interest rate. One of the major benefits of using this option is that your bad credit profile won’t cause much of a problem here. Money lenders don’t have strict policies, and you could secure a large loan even if you don’t have a decent credit score or a good employment history. Some online lenders such as Loan Canada will also help improve your credit score if you pay off the loan on time.
What To Watch Out For
Private money lenders are not as safe as banks or reputable firms. Before taking a loan from any such lender, make sure that it is reliable and safe. Do some research on your own to find the best online money lender in your area, and talk with some of its previous customers before striking a deal.
Home Equity Loans and Home Equity Lines of Credit (HELOCs)
A home equity loan is a secured loan that you can receive by using your house as collateral. You will be required to pay the home equity loan with equal monthly payments over a fixed period of time. It essentially works like a mortgage. If you are planning to apply for a home equity loan, you will need to have more than 20% home equity. Nearly all of the lenders require you to be a house owner as well. Before applying for a loan, we suggest you calculate your home equity loan.
Home equity lines of credit, or HELOCs in short is another option if you are in a dire need of furniture. Instead of getting a fixed amount of loan, with a HELOC, you will get a revolving line of credit. This means that you can borrow money (up to a limit) using your house as collateral, pay it back, and then borrow it again (if you want to).
If you are looking for reputable firms to offer you a HELOC, Loans Canada is a good option. Loans Canada extends its services across the whole of Canada, and with interest rates ranging from 3.45%-11% and an easy payment plan, this is one of the best options for you.
This is a high-risk, high-reward option. If you end up paying back your loan on time, then there won’t be a problem. However, if you default on your payments, then you risk losing your house to the lender.
Things to Keep in mind while financing your furniture
Buy Only What You Can Afford
This is a no-brainer. Buying excessive furniture that you won’t be able to pay off later will only lead to more debt. This will also damage your credit score even further, creating all sorts of financial complications for you.
Look for Interest-free Loans
Several credit card companies and even some furniture shops offer interest-free loans. Try to find these companies and apply for these loans. These companies usually require a good credit report and employment history – so if you don’t have these, it might be a bit difficult to get these interest-free loans; otherwise, it is a great payment option
Watch Out For Deferred Interests
Several companies offer interest-free loans, but these loans are only interest-free during a promo period. This means that if you are unable to make your payments by the end of that period, all of the interest you were supposed to pay on the loan comes back, and is added to your next payment. Therefore, before opting for these lucrative looking interest-free loans, carefully read their terms and conditions.
Make Timely Payments To Improve Your Credit Score
If you take a loan from a bank or any accredited online lender, you can improve your credit profile by making timely payments.
In-store financing is the easiest option if you’ve got bad credit. However, make timely payments to ensure that you don’t end up getting stuck in the debt due to rising interest rates. Personal loans from banks are usually less risky, but you will probably not get a decent deal if you don’t have good credit.
Furniture Financing Canada – No or Bad Credit
It is easy to sign up as many firms offer 0 percent or lower interest deals for the first six to 24 months. The financing fee is charged for the purchase at the beginning of the promotion period (usually 3 months), after which a minimum payment on the loan is due. The low or zero interest rate is determined after a few months based on the approved credit.
If you have bad credit and need a furniture loan, online lenders are an option. However, online lenders specializing in bad loans will face higher interest rates as they take on more risk.
Online shopping can be helpful for people with poor finances, and there are various online furniture stores and credit check financings that offer a simple solution for people who cannot shop because of bad credit. The advantage of buying from these online lenders is that you do not have to go through the lengthy application process that you may have to do when you go online.
Furniture stores without a credit check The furnishing of your home may not be a dream, but you can still buy furniture that you love while keeping an eye on your budget and comfort. When you buy furniture online, it is delivered in a series of short clicks for your convenience, saving you unnecessary hassle. Furniture is fashionable, and you can buy living room furniture at affordable prices.
There is an extensive selection of furniture to beautify your living room. There are countless companies available that are happy to offer furniture to new customers. Hallway furniture is becoming more important in the UK than other furniture.
Unlike loans and other financial products, you can’t use bad loans to finance furniture, such as leasing, renting or owning a store. Furniture finance is offered through a furniture store like Room to Go, where credit cards are not a good idea. Instead, it offers deferred interest, just like a credit card.
Ashley Furniture differs from other companies today. We have mentioned that it does not offer financing without credit checks. Instead, they approve borrowers with credit ratings of up to 550 points, allowing them to obtain traditional furniture financing if they so wish.
You need good credit and a low leverage ratio to get a good deal on a personal loan. Personal loans can range from $500 to $50,000, but you can find lenders such as banks and credit unions that offer up to $100,000. If you have bad loans, you can get a loan from a lender specializing in bad loans but with higher interest rates.
Dealing with an online lender is one of the easiest and most painless ways to finance furniture in Canada. Not only are your chances of obtaining a permit higher, but you can also do financing from the comfort of your own home. Online lenders, including Loans Canada, are willing to work with anyone with bad loans to help them get the finance and furniture they need.
When you’re thinking about buying furniture, you’re probably wondering how best to finance it. We’ve shared some of the best places to finance furniture, a few options to avoid and where to go with a credit card when financing furniture. Now that you know the options for financing furniture in Canada, you can choose from a few tips of what to look for when financing furniture for your home, as well as a few general tips when it comes to furniture buying.
You should only consider furniture store financing options if you are sure that you can pay off the balance on schedule. Financing through a furniture store you are considering using a credit card can offer promotional APRs of 0% on purchases.
Try our simple pay-as-you-go furniture lease: pay once a week, pay once a month, or get a great two-week payment that matches your payday. Then, send the monthly payment to a special savings account or send it directly to your lender.
As a Luthercharge membership cardholder, you receive the additional protection of our extended furniture warranty. This entitles you to free services for your purchase; pay later for furniture financing purchases for the duration of your payment plan following the manufacturer warranty. Furniture is designed for you, so take full advantage of our sales and offers.
We’ve compiled a list of the seven best deals that offer poor credit. This list contains information about non-performing loans and how to obtain approval for such loans. Rent-a-Center is one of the most popular places for bad credit financing.
Some places require a credit check, but chances are they’re willing to work with anyone. Heloc is an affordable option for borrowers who do not have a large loan. Online lender Canada is ready to get the job done for those with bad credit, and you might be able to secure a loan at a reasonable interest rate and affordable payments.