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  • Writer's pictureHinton Magazine

Loan to Furnish Your New Home- Is It a Smart Move?

Furnishing your home or upsizing the living space can be an uphill task. You have a lot to take care of, the aesthetics, space, theme, and whatnot. The trickiest part is furnishing because buying a new sofa or adding something to the existing furniture can cost a fortune.

If you have just bought a new home, shelling out an additional amount to buy furniture can strain your whole budget. In such scenarios, most people plan on taking out a loan to finance their home furniture. But, what you need to think about is if it’s a smart move.

Personal Loan: Pros and Cons to Consider

People who can’t afford to buy furniture mostly opt for a personal loan, which is a viable and obvious option for two primary reasons.

Firstly, it allows you to borrow money for any purpose and a good credit score can get you an affordable interest rate.

Secondly, a personal loan has a lower interest rate than a credit card.

However, before you take your next step to raise a personal loan, take a moment and analyze if it can wait. If yes, then go for that option right away. Hold off buying a new one for a few months until you save enough. Prefer buying it without raising a budgeting loan or borrowing.

Loans make your purchases costlier as you pay interest on them. So, a $1,200 couch would cost you around $1,500. Avoid debt because facing the burden of paying loans and high interest is worse than enjoying emptier space in rooms.

Different Ways to Finance New Furniture

In-store Financing

A few stores offer to finance and provide a promotional introductory rate of 0% at times for the first 12 to 24 months. So, if you can repay the loan before this time, it’s a great option. However, a few deals have deferred clauses, so if you can’t pay the loan within this period, the interest amount would add to the principal amount. So, check carefully before signing the deal.

Personal Loans

A personal loan is also a popular choice. You can seek the best deals if you have a good credit score and low low debt-to-income ratio. Although these loans range from $2,000 to $50,000, some lenders even offer $1,000 to $100,000. The interest rates can vary between 6% to 36% with loan terms for 3-5 years. You should choose the right type of personal loan based on your credit score and the requirement to obtain a minimum APR.


This furniture finance allows you to reserve your favourite piece of furniture in the store until you pay for it in instalments. There is no interest but you have to pay a down payment before starting EMIs. Also, there can be a one-time fee or if you drop the plan to buy the furniture, there can be hefty cancellation fees.

Rent-to-own Stores

If you are uncertain about buying a new table or sofa, then you can rent and return it anytime without an additional fee. This is the best way if you are staying at a place for a limited time or someone is visiting you for a month. The catch is that you might be paying for the product more than it’s worth.

Home Equity Loans

Here, you can borrow against your equity in the home. Needless to say that your home will be collateral in these loans so you are likely to get favourable interest rates and terms than unsecured loans. If you are looking for bad credit loans due to your low score, then go for this. However, you might lose your abode if you fail to repay the loan.

Credit Cards

If you are making a small purchase or want to seek the benefits of 0% financing, this would be an ideal choice. To buy something expensive, sign up for a new credit card that comes with a 0% promotional period and without a deferred interest clause so you don’t have to pay extra for missing a payment.


Every financing option has its pros and cons. Personal loans come with less risk and can save you money if you have a good credit score. However, they are not easy to borrow. In-store financing is easily available but has its risks. So, consider all the factors, evaluate them, and then go for the option that suits your budget and requirements.

Author Bio: Tanya Singh works as a Content Marketer at LoanTube - a loan comparison marketplace where borrowers can connect with multiple lenders via a convenient and transparent application. She writes about topics related to personal finance and loans helping her readers in making smart decisions when they need to borrow. Yoga brings her inner peace and strength, and travelling brings her joy (besides her work of course).


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