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How Appliance Loans and Financing Work

Do Appliance Loans Cover the Cost of Kitchen Appliances?
Sulaiman Abdur-Rahman
Sulaiman Abdur-RahmanUpdated March 24, 2023
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Appliance loans can cover the cost of kitchen appliances. These appliances, including refrigerators, dishwashers, ovens, microwaves, and stovetops, can individually cost hundreds or thousands of dollars. To help pay for these expenses, consumers may consider a variety of home appliance financing options.Personal loans, credit cards, home equity loans, personal lines of credit, and in-store financing can serve as appliance loans. Below, we explain what appliance loans are and uncover several factors that may affect the cost of new kitchen appliances.

What Are Appliance Loans?

Appliance loans, also known as home appliance financing, are any financial lending product where consumers can borrow money to pay for the cost of buying an appliance. As mentioned above, personal loans, credit cards, home equity loans, personal lines of credit, and in-store financing can all serve as an appliance loan.Appliances can individually cost hundreds or thousands of dollars, while the cost of remodeling your kitchen can exceed $30,000, according to HomeAdvisor. Appliance loans can help you meet these expenses.Home appliance financing is for buying kitchen fixtures, such as refrigerators, microwave ovens, and induction stoves. It’s essentially a home improvement loan for replacing and installing kitchen appliances.In addition to remodeling your kitchen, home improvement loans can be used for the following purposes:

Can You Pay for Kitchen Appliances With an Appliance Loan?

You can buy kitchen appliances with an appliance loan. What’s an appliance loan? An appliance loan is any financial lending product where you borrow money to pay for the cost of buying an appliance.Kitchen appliances can consist of refrigerators, dishwashers, ovens, microwaves, and stovetops. Appliance loans can finance the purchase of those items, and appliance loans can help pay for other household appliances outside of the kitchen.

What Does a Kitchen Appliance Loan Cover?

Here are some items a kitchen appliances loan may cover:
  • Refrigerators
  • Dishwashers
  • Ovens
  • Microwaves
  • Cooktops or stovetops
  • Kitchen sinks
  • Ranges

Typical Requirements for Appliance Loans

Typical requirements for an appliance loan may require borrowers to provide documentation verifying their identity, employment, and gross monthly income as part of the application process. Lenders may ask you to present photo identification, such as a driver’s license, and lenders may also ask you to provide your Social Security number.Appliance loans for bad credit may exist, but lenders may generally require borrowers to have good credit and a low debt-to-income ratio to qualify for an appliance loan. Appliance loans can be secured or unsecured. Secured loans require borrowers to offer an asset or personal property as collateral.Unsecured loans, including signature loans, are not backed by collateral and may be harder to get if you have poor credit. Yes, it can be difficult to find appliance loans for bad credit.

What Is the Average Cost of Kitchen Appliances?

The average cost of home appliances is $2,175, according to HomeAdvisor data. Refrigerators can cost several hundred dollars on the low end and more than $10,000 on the high end. Dishwashers can range from $330 to $1,900 depending on the brand, size, and features.

Price of Kitchen Appliances

Here are the price ranges for various kitchen appliances, according to HomeAdvisor data:
Appliance typeLow endHigh end
Stovetop / Cooktop$320$4,030
Kitchen Sink$60$2,000
Here are refrigerator price ranges by size, according to HomeAdvisor data:
Cubic feet of space insidePrice range

Kitchen Appliance Repair Cost

The cost of repairing a faulty kitchen appliance can range from $40 to $500 on average, according to HomeAdvisor.Replacing a faulty refrigerator is sometimes more cost-effective than repairing it, especially if the appliance is more than 10 years old. Repairing old refrigerators can cost up to $1,200, according to Fixr, a company that researches and publishes data about the home remodeling industry. Refrigerators have a 13-year average life expectancy.

How Often Should You Replace Appliances? 

Consumers may consider replacing their appliances once the appliance reaches the end of its useful life. Appliances can last for 10 to 15 years on average with regular use, according to HomeAdvisor.As mentioned above, replacing a faulty kitchen appliance is sometimes more cost-effective than repairing it, especially if the appliance is more than 10 years old.Recommended: Average Costs to Replace Kitchen Cabinets

Factors That Affect the Cost of New Kitchen Appliances

Here are some factors that may affect the cost of new kitchen appliances:


High-end kitchen appliance brands generally cost more than budget brands. For example, kitchen appliances under the Miele, Liebherr, and Dacor brands may cost thousands of dollars, while similar appliances under the Haier, Insignia, and Frigidaire brands may cost hundreds of dollars.


High-quality appliances generally cost more than similar appliances of lower quality. Consumers can rank appliance quality based upon their user experience. For example, J.D. Power’s 2022 U.S. Appliance Satisfaction Study is based upon 21,095 evaluations from customers who purchased home appliances.KitchenAid ranked the highest in customer satisfaction among cooktops in the 2022 J.D. Power study, while Frigidaire ranked the lowest. KitchenAid’s high-end cooktops generally cost more than Frigidaire’s high-end cooktops.

Energy Efficiency

Energy Star-certified appliances meeting strict energy efficiency requirements set by the U.S. Environmental Protection Agency generally cost more than their noncertified counterparts.Energy Star-certified appliances consume less energy than their noncertified counterparts and, therefore, can help consumers save money on their energy bills.Recommended: Gas Stove vs Electric Stove: Which Is Better?


Some gas or electric utility companies may offer rebates up to $75 for customers who purchase Energy Star-certified refrigerators. Energy Star-certified appliances can be $30 to $200 more expensive than their noncertified counterparts, according to HomeAdvisor.

Supply And Demand

Bottlenecks in the supply chain and high demand for kitchen appliances can lead to soaring prices for these items. Consumer Price Index inflation data show the price for major appliances, including refrigerators, stoves, ovens, and microwaves, increased 8.4% from December 2020 to December 2021 amid pandemic-related supply chain woes.The price for major appliances has since come down, which could be related to changes in supply and demand. Global supply chains have largely returned to normal as of the first quarter of 2023, and consumer demand for major appliances may have decreased due to higher interest rates.

Paying for Appliances Upfront vs Financing

You don’t have to borrow money and pay for costly appliances over time if you have enough savings to buy appliances upfront. An all-cash transaction is entirely possible. You can avoid debt and buy new appliances with a debit card linked to your checking account.Paying for appliances with open-end credit or closed-end credit may be right for you if you’re short on cash or you wish to conserve your savings. Common forms of financing include credit cards and personal loans. One of the downsides to credit cards and personal loans, however, is that they may include interest charges.If you have money in a bank deposit account, you may withdraw funds for the purpose of buying an appliance. You may access your savings with an ATM card or debit card and spend the money as you wish.

Other Ways to Finance the Purchase of Kitchen Appliances 

Here are some additional ways consumers can finance the purchase of kitchen appliances:

Credit Cards

As mentioned above, borrowers may use credit cards to finance the purchase of kitchen appliances. Credit cards are a revolving line of credit allowing cardholders to make transactions up to the card’s credit limit.Credit card companies may offer an interest-free grace period on new purchases. Consumers with good credit may qualify for a credit card that offers 0% interest on purchases for a 21-month promotional period.

Personal Lines of Credit 

Borrowers can use a personal line of credit to finance the purchase of kitchen appliances. Personal lines of credit are revolving forms of credit similar to credit cards. The personal line of credit allows borrowers to withdraw funds up to a set limit for personal spending.Borrowers can repay their personal line of credit debt on a flexible timeline with minimum monthly payments or greater.

Personal Loans

As mentioned earlier, you may finance the purchase of kitchen appliances with a personal loan. A personal loan provides you with a lump sum of money and the freedom to spend it on virtually any personal endeavor, such as debt consolidation or buying a new refrigerator.The personal loan impact on your credit score could be negative if you miss payments and default on the loan.One of the advantages of using a personal loan over revolving credit is that the personal loan can provide borrowers with a lump sum of cash, a predictable repayment schedule, and potentially lower interest rates.

Home Equity Loans

Home equity loans can provide homeowners with a lump sum of money to use for kitchen remodeling. Kitchen remodeling projects can exceed $30,000 and may include the purchase and installation of new appliances.These loans allow homeowners to borrow against the equity of their home as collateral. Some lenders may allow you to borrow up to 80% of the equity in your home.

In-Store Financing

Retailers may offer in-store financing to help you pay for the cost of buying, delivering, and installing a kitchen appliance. Some retailers may allow you to make interest-free monthly payments over a six-month period.


Some appliance shops may offer rent-to-own or lease-to-own payment plans. Buying kitchen appliances under a lease-to-own agreement means you don’t actually own the appliance until you make all of your monthly lease payments or pay off the lease early.You may need proof of income to qualify for a rent-to-own agreement. Payments on a lease-to-own agreement generally go toward the cash price of the merchandise plus a lease service charge rather than interest.

In-Store Financing vs Personal Loans

The below table compares in-store financing vs. personal loans: 
In-store financingPersonal loans
May feature an interest-free promotional periodMay charge daily simple interest from the date you accept the loan
Can help you build creditCan help you build credit
May require good credit and sufficient income to qualify for a high credit limitMay require good credit and sufficient income to qualify for large loan amounts
May have the option to make minimum monthly paymentsMay feature fixed monthly payments
May come in the form of revolving creditRepresents an installment loan that must be repaid over a set term
May impact your credit utilization ratio and debt-to-income ratioMay impact your debt-to-income ratio

Is Financing Appliances Bad for Your Credit?

Financing the purchase of appliances with a consumer loan can help you build credit. Making decisions to build your credit may be right for you if you want to conserve your savings or pursue investment opportunities. That being said, applying for an appliance loan may impact your credit if the lender conducts a hard pull inquiry into your credit report. Hard inquiries can cause your credit score to drop by several points. Missing payments and failing to repay your debt can also damage your credit.

Personal Loan Rates

When you need to borrow money to buy appliances, Lantern by SoFi can help. Just provide basic information about yourself and the loan you need, and Lantern can guide you in the process to apply for online personal loans with the lender of your choice.Compare personal loan interest rates with Lantern.

Frequently Asked Questions

How much does a set of kitchen appliances cost?
What is the average cost of kitchen appliances?
How often should you replace appliances?
Can you finance appliances?
What is an appliance loan?
Photo credit: iStock/Iuliia Zavalishina

About the Author

Sulaiman Abdur-Rahman

Sulaiman Abdur-Rahman

Sulaiman Abdur-Rahman writes about personal loans, auto loans, student loans, and other personal finance topics for Lantern. He’s the recipient of more than 10 journalism awards and served as a New Jersey Society of Professional Journalists board member. An alumnus of the Philadelphia-based Temple University, Abdur-Rahman is a strong advocate of the First Amendment and freedom of speech.
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