Home is where the heart is. This quote by Holmes puts light on the fact that our living space is pious and it needs to be well thought of and planned.
A house becomes a home when the interior space of our house is planned and arranged according to the people who live in that space. The color of the walls, the patterns used, the furniture, its color pattern, placement, and arrangement, each of these intricate details play a significant role in transforming a house into a home.
Anyone who has built or purchase their own space will tell you how much they have invested in the space and how furniture shopping takes a toll on them. It isn’t such a blind fact that furniture and that too classy and shows pieces that work for your home is not merely available. It is an investment in itself.
It is this hitch that the furniture industry has worked in managing and finding better solutions. The answer they have come up with is Furniture Financing.
What is Furniture Financing?
Furniture Financing is a method that most of the stores at present have an option for. As the name suggests, it is kind of like buying furniture on loans and paying it off later on.
There are several modes of furniture financing available. Even though it takes off a load from you, you need to understand the process so that there wouldn’t be any unnecessary problems and confusion later on.
1. In-store Mode of Financing:
This is by applying for credit in the store itself. A monthly amount has to be deposited and keep in mind that it is regular so that the interest rates are not taxing and added up.
2. Furniture loan/ home improvement loan:
This is another prevalent option preferred even better than a credit card. These are usually having a low and fixed interest rate.
3. Credit card:
These are used but in long run can bring down your credit scores, so less preferred for huge furniture purchases.
4. Rental furniture:
In this mode, the store is allowing to rent the furniture and you need to pay the rent monthly, failing to do so there will be a repossession of the item by the store.
Things to keep in mind before financing furniture:
1. May it be the last resort:
Even though financing the furniture may seem very apt and easy, it isn’t always the case. There are advantages and disadvantages of this action. Paying with cash is always a great option as it is safe and it is done and dusted then and there. Let this option of financing be a last resort and a final course of action.
2. Understanding the term Zero interest:
Usually, the stores have this clause of Zero interest. Be sure to read the agreement before signing it, as sometimes you might just fall into a cash trap with more debt and interest levies. Whenever an agreement or clause is presented to you, make sure you totally understand the process and then make a commitment. A mild and absent-minded behavior can land you in monetary troubles.
3. Lowering down your Credit Utilization:
Usually, furniture loans when reflected in the statements, are looked down upon by companies and reduce your credit points thus bringing your credit utilization also down, which should be kept in mind while making this decision.
4. What is the option of Layaway?:
It is the process by which the retailer lets the furniture away with a small down payment and if the remission is not made before the stipulated time, the item is reclaimed. Possible obstacles that you face in this setting can be that your money will not be given back if at all the agreement is scrapped and if your payment cycles are disturbed.
5. Refined credit card buys:
Credit cards are an easy way of buying the furniture you have been dreaming of. But an important point to be understood is that credit card buys often come with high interest rates and that can weigh you down and pose an immense problem later on.
6. Furniture for Rent:
This is undoubtedly one of the best and viable options available in the market right now. This is prominent because there is only a rental lease and you can decorate your dream home in a very efficient and rapid way without worrying about the financial stakes of the situation. The only disadvantage of this is the fact it is not recommended for long-term commitments. It is the best for short-term buys otherwise you will end up investing way more than the actual furniture in itself.
7. Retailer Financing:
Probably one of the most preferred modes is in-house financing. In this, they offer a promotional period with no interest availed and you can comfortably pay for the furniture within that time window. Getting charged with a 10- 20% interest is the possible downside of this option, so make sure you are very punctual and up to date with your payments.
Now that we have understood about furniture financing, let us evaluate whether to opt for financing furniture at all. It is probably best if you could save up for buying furniture. Think about all the energy, and time that you will save if you could just wait around and buy a furniture piece that you can afford at the time.
The major advantage of this is that you will be paying with money and there is no dread of monthly payments and it is more hassle-free. It will surely be a hole in your pocket, at that very moment but you do not have to worry about it later on and can enjoy your decor item with not a tinge of fear.
A very simple, effective, and almost cliche thing to do is to plan, when are you building or buying your own space, what will be your financial assets at that time, how much is the budget, what are the other costs that you might encounter, so for and so forth. Be sure to have a dedicated bank account for your furniture savings.
It is best to save up enough money through diligent planning than to finance them as it comes with its own set of rules and clauses which can get inconvenient real soon.
If at all that doesn’t work then you can opt for credit cards with promotional 0% introductory APRs. This can be of benefit and will not lower down your credit scores. This can be an option if your plan is all of a sudden or your furniture savings have been utilized for something else.
Furniture Financing can be a great option but it is like a two-sided sword, if not properly understood and executed it can end up being troublesome. It is probably the best to take it up as the last option. It does have its own rules and clauses, so make sure you read them thoroughly before you opt for a method.