It always seems to be the case that just as you are getting back on your feet financially, something else happens that needs money thrown at it. Take a kitchen appliance for example. Suddenly your fridge freezer, oven, washing machine or dishwasher packs up. You work out that the fault is so major it’s not worth the cost of repair. So you need to replace it as soon as possible, but what is the best way to pay for this?
This is the time when you wish you had savings put by for such a situation. And if you do, then paying the equivalent of cash upfront is probably the best way of buying your new appliance. But if not, there are various other ways of funding it.
Let’s take a look at five ways you could pay for a new kitchen appliance.
One of the most cost-effective options is to see if there is a family member or friend that you trust and would be willing to help you with an emergency loan. This could be a good option if you know you will definitely be able to pay them the money back in a relatively short period of time. So, for example, if you know that you will be getting a pay rise or work bonus in a couple of months, and would be able to cover the cost then, asking family or friends to fill the gap could be an option well worth considering.
Many lenders offer same day loans which do exactly as they say. Loans same day means you get your money the same day as you apply for it. For example, Munzee offers same day loans for which you can apply online and, if your loan is approved, the money will be in your account the same day.
The advantage of same day loans is that you can pay for your appliance upfront, and can then repay the loan when you are ready to do so. Munzee’s normal loan repayment period is 24 months but you can pay it back at any stage before this if you are able, and there is no charge for doing so. This means that you also save money on the interest you pay, as you will only pay it for the period you actually had the loan rather than the full 24 months.
Another way to pay for a new appliance is to take out a loan with the retailer you buy it from. This is traditionally known as a hire purchase agreement. It can seem an attractive option because you may be offered a low rate of interest, perhaps even 0%, and can often pay over a period of up to 5 years.
However, if you have a long repayment period, you may well find that you are still paying for your appliance when you are no longer using it. For example if you move home or if that appliance also breaks down. There may also be penalties if you want to pay off your loan earlier than the period you took it out for.
Also be aware that to be offered a store hire purchase agreement you are likely to need very good credit history, so if there are any issues with that, there is the possibility you may be denied this form of credit.
Another variant of a store loan is Buy Now Pay Later, or BNPL. This is when you are offered the option of paying for your appliance in 3 or 4 instalments, usually through a financial company such as Klarna or Clearpay. This seems an ideal solution as you only need to find part of the cost upfront.
However, there are a few things to be aware of if you are considering the BNPL route. The first is affordability. If you can’t afford to pay for the whole cost now, how confident are you of definitely being able to pay the BNPL instalments when they are due? Bear in mind that these will be large amounts of money and will need to be paid along with all your normal expenses.
If you are unable to make any of the following payments, the first thing that happens is that you will have late payment fees added onto what you already owe. So your debt will increase. And if the situation continues you may eventually be referred to debt collectors to recover the money you owe.
So if you plan to use BNPL just make sure that it is an affordable payment method for you, and you are not taking on more deferred debt than in reality you are able to repay.
In some ways a credit card can be a good way to pay for a new kitchen appliance. For example, when you make a purchase over £100 on your credit card you are covered by extra protection under Section 75 of consumer credit law if something goes wrong. This is because your credit card provider is equally liable with the retailer if issues arise with the purchase.
The snag with credit cards is that it is all too easy for debt to mount up on them. So it’s unwise to use them for a major purchase such as a kitchen appliance unless you are able to repay the money very quickly. For every month you leave a balance (i.e. debt) on your credit card you will be charged interest on that balance, often at a high rate. And if you only pay off the minimum repayment each month, that interest will keep growing and growing until you end up just paying off the interest rather than the original balance.
So if you plan to use a credit card to fund your new kitchen appliance, just ensure that you repay it as soon as possible, otherwise your purchase will end up being far more expensive than you originally thought.
We hope that this article has helped you to think about how you would fund a new kitchen appliance if you had to do so. And if you are interested in the loans same day option, check out Munzee’s Same Day Loans to see how we could help.
Check back here soon for more lifestyle and financial tips from Munzee Loans.
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