Knowing Your Furniture Financing Options

Lauren WardUpdated March 19, 2025

Share this article:

Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

If you’re giving your home a refresh, furniture financing can help make the process more affordable. There are many different options to help finance furniture, depending on your needs. Read on to find out what financing is available, the pros and cons of financing furniture, and how to choose the best method for you.

What Is Furniture Financing?

With furniture financing, you borrow money to pay for the furniture you’re purchasing. You then repay the money over time with interest. Furniture financing allows you to get your furniture quickly, but you’ll want to make sure you can pay back the money you borrowed.

Is It Necessary to Finance Furniture?

Financing furniture is not always necessary, but it can be a helpful option for those who need essential furnishings but lack immediate funds. Instead of saving up and waiting to buy furniture, financing allows you to make smaller monthly payments over time.

Pros of Furniture Financing

Get the furniture quickly
Allows you to pay the cost of furniture over time
Low-interest borrowing options for creditworthy individuals
On-time payments may help build your credit score

Cons of Furniture Financing

Pay interest on the furniture purchase
Increases a borrower’s debt-to-income ratio
Reduces available cash each month
Fines and fees may be involved if payments are late

Benefits of Using a Private Lender for Furniture Financing

Financing for furniture purchases can be done through private lenders, and there are benefits to choosing this option. Private lenders often have flexible loan options. That means you can likely get a furniture loan with a monthly payment that fits your budget. Loans from private lenders also tend to have fast turnaround times — you might be able to get your funds within 24 hours, depending on the lender.In addition, private lenders are often able to offer much lower interest rates than alternative lending options. Recommended: Does Financing Furniture Hurt Your Credit?

7 Options for Furniture Financing

1. Rent to Own

With rent to own, instead of paying for the furniture outright, you make regular monthly payments until the furniture is paid off. However, if you miss any payments, the retailer could repossess the furniture.

2. In-Store Financing

In-store financing is a fast and easy way to get furniture financing. You apply for credit at the retailer you’re buying the furniture from. Some retailers offer 0% interest for a period of time, but if you don’t pay off the furniture before the promotional period is over, you will have to pay interest — and potentially back interest, as well. Interest rates on this type of financing can be high.

3. Layaway

With layaway, you place the furniture on hold and make regular payments until it is paid off. On the plus side, you can spread out your payments and avoid taking on debt. However, you don’t get the furniture until it is paid off, and you may be charged additional fees, such as storage and service fees. Recommended: Guide to Point-of-Sale Loans

4. Line of Credit

A line of credit is a revolving form of credit that’s similar to a credit card, but there are some differences. A line of credit often has a lower APR than a credit card does, but it also has a lower credit limit. As you pay down the balance, the credit once again becomes available. Lines of credit generally don’t come with any rewards or points, and they can be more difficult to qualify for than credit cards.

5. Payday Loans

A payday loan is a type of loan with a very short term (usually a month or less) and very high fees. Typically, the loan amount you can borrow is a portion of your paycheck and is capped at a certain level. These loans don’t require a credit check, but you typically have to give the lender access to your bank account so they can take the money you owe from it. Some payday lenders are considered predatory because they use deceptive practices.Recommended: Getting Out of Payday Loans

6. Credit Cards

Using a credit card is an easy and convenient way to purchase furniture, but credit cards typically come with high interest rates. Also, depending on how much furniture you’re buying, you may not have a high enough credit limit.Some rewards cards let you earn points, miles, or cash back; others offer a promotional 0% APR for a period of time. If you can’t pay off the furniture before the promotion ends, however, you will have to start paying interest, and you might even be charged back interest.

7. Personal Loans

With a personal loan, you get a lump sum of money that you pay back over time with interest. Personal loans often have fixed interest, and personal loan average interest rates are typically lower than that of other options. The higher your credit score, the lower the interest rate and better the loan terms you may be able to get.Personal loans are flexible, so the money you borrow can be used for just about anything. For instance, you can get personal loans for home improvement, which can include the cost of furniture.Your personal loan term, or length of the loan, can help determine how much you’ll pay each month. By increasing the term length, your monthly payments will be less, but you’ll pay more in interest over time. A shorter loan term usually means a higher monthly payment, but you’ll save money on interest.

Furniture Financing Requirements

Down Payments

Some financing options, such as layaway, may require a down payment on the furniture purchase. So you would need to put money down at the start.

Credit Score

Your credit score helps determine the amount of money you can borrow, the interest rate you may be charged, and the term of your loan. If you have a low credit score, you may receive a higher interest rate or be denied access to credit altogether.However, some lenders choose to work with borrowers who have fair or poor credit. When you apply for credit, make sure the lender works with individuals in your credit range.Recommended: What Is a Good Credit Score?

Documents

Depending on the lender, you may be asked to provide certain documents to prove your eligibility for a furniture loan. In addition to a completed loan application, some of those documents might include:

Proof of identity, such as:
- Driver’s license
- Military ID
Proof of address
Proof of employment

Income

A lender wants to see that your income is strong and steady enough to handle the monthly loan payments. They will also look at your debt-to-income (DTI) ratio, which is your gross monthly income versus your monthly debt. Generally, the lower your DTI, the better.

The Takeaway

If you’re buying new furniture but don’t have the cash to pay for it, furniture financing can help. There are many financing options available, each with pros and cons, and different criteria may be needed to qualify. As you’re exploring personal loans for your furniture financing, Lantern by SoFi can help simplify the process. Just fill out one form, and you can quickly compare personal loan interest rates from multiple lenders in our marketplace. That makes it convenient to find the loan that best matches your needs.Check your rate today with Lantern.

Frequently Asked Questions

What are the benefits of using a private lender for furniture financing?

What is the credit score requirement for financing furniture?

Can you use a personal loan to finance furniture?

Photo credit: iStock/Prostock-Studio

LNTPL-Q125-068

About the Author

Lauren Ward

Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.

Share this article: