People with weak borrowing credentials often look to finance home appliance purchases without a credit check, thinking this is the only way to arrange monthly payments.
A consumer report with delinquencies, charge-offs, repossessions, or bankruptcy makes your quest more challenging but not impossible.
Three approaches can help you succeed in your mission: reach out to subprime lenders before making a purchase, keep prices as low as possible, and explore every alternative.
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Pay Monthly Appliances No Credit Check
Several appliance financing options allow consumers to make monthly payments without a credit check. The primary alternatives offer opposite benefits.
- Starting the process before buying a refrigerator, dishwasher, stove, washer, or dryer increases your chances of approval – a key consideration when your borrowing credentials are weak.
- Beginning the process at the point of sale is more convenient (one-stop shopping), but it could hurt your approval odds or increase costs over time.
Subprime Lenders
Connecting with an online subprime lender is often better than financing an appliance purchase without a credit check. Do not limit your options by waiting until the last minute.
People with poor borrowing credentials fare better when they line up the financing before entering the retail store. When you delay this step, you lock yourself into one provider who might reject your application.
Increase your approval odds in two ways by taking proactive steps.
- Boost volume: present your credentials to a vast network of lenders
- Looser criteria: subprime companies approve more consumers
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While most subprime companies will pull a copy of your consumer report and consider your FICO® or Vantage® score, their underwriting is far more lenient. The hard inquiry is insignificant when your credentials are already weak.
Rent-to-Own
Rent-to-own arrangements could allow you to finance a kitchen or laundry appliance without a credit check and make payments later (monthly, semi-monthly, or weekly). However, waiting until the last minute might cost you a bundle.
Before signing on the dotted line, you should know the potential downsides to using rent-to-own contracts. Read the agreement carefully, looking out for any of these potential pitfalls.
- Balloon payments at the end of lease terms to transfer ownership
- Total installments exceed the retail price by 100% or more
- Requirements to purchase insurance or extended warranties
- Possible repossession without compensation for money received
Buy-Now-Pay-Later
Buy-now-pay-later programs are another financing option with no credit check. Under these programs, you can make weekly payments after purchasing an appliance. However, waiting until the last minute might mean a denial at the point of purchase.
Buy-now-pay-later companies keep account limits tiny for new customers. For instance, you could be disappointed if your maximum spending power falls short of the bargain-basement price—not to mention premium brands.
| Appliance | Minimum Price | Maximum Price |
|---|---|---|
| Refrigerator | $500 | $10,000 |
| Stove | $500 | $15,000 |
| Dishwasher | $750 | $8,000 |
| Washer | $500 | $1,500 |
| Dryer | $600 | $4,500 |
Financing Appliances with Bad Credit
Often, it pays to get creative when trying to finance home appliances with a bad credit history and a low FICO® score. Winning approval for monthly payments is challenging when adverse information litters your consumer report.
Find three alternatives you might have overlooked.
Refrigerators
The best way to finance a refrigerator with bad credit is to reduce the net purchase price of the kitchen appliance. A lender will likely approve your application when you minimize the money borrowed.
Because refrigerators consume electricity twenty-four hours a day, seven days per week, you have several opportunities to minimize your spending.
- Free refrigerators for low-income families eliminate the need to borrow money when the government supports the installation of energy-efficient appliances via the Weatherization Assistance Program.
- ENERGY STAR® rebates reduce the purchase price of energy-efficient refrigerators by $50 to $75, regardless of your income classification
- Energy-efficient refrigerators reduce your utility bills, making staying current on other obligations reported to the bureaus easier.
Washers & Dryers
Consumers with bad credit histories have two different approaches to finance washers and dryers when lenders deny applications for monthly payments.
Be very careful to control costs because you need every penny to retire existing debts to improve your ratings.
Laundromat
Your local laundromat may offer the most practical way to finance a washer and dryer when you have bad credit and lenders deny your application.
Laundromats are less convenient but allow you to rent washers and dryers by the hour instead of monthly, where the appliances sit idle most of the time. The approach makes the most fiscal sense for single people because they run the fewest laundry loads.
Leasing
People with bad credit can also lease washers and dryers. Appliance rental companies offer ways to pay monthly without pulling a copy of your consumer report or considering your FICO score.
The monthly lease payment for your washer and dryer will be in the same range as if you purchased the appliance. However, the rental arrangement never ends, meaning you could cost yourself a bundle over an extended period.
