How To Finance A Laptop When You Have A Bad Credit?
Laptops are essential productivity tools - especially at a time when so many of us are working from home. If you’d like to replace your current computer, you may be wondering what financing options are available for bad credit customers.
Read on to learn about several ways you can purchase your new device without the need for stellar credit.
Retail Financing Plans
Both online retailers and electronics stores offer repayment plans that’ll let you purchase a laptop right away and pay it off over a number of months or years.
- While browsing your favorite online computer retailer’s website, you’ll want to look out for repayment deals and other financing options. You could benefit from a limited time offer that includes free accessories or lower than usual monthly payments
It’s worth noting that many retailers will run a credit check when they process your application. If your score is in the 500s or below, there may be a chance that you won’t be able to make use of this financing option. Fortunately, there are several other alternatives you can consider.
Borrowing From Your Savings
It’s recommended that everyone should have three to six months’ worth of expenses saved up in an emergency fund. If you’ve exceeded this amount or you feel comfortable in your current financial situation, you may want to consider using some of your savings to pay for your new laptop.
- This strategy has several advantages like saving on interest payments and not having to budget for additional monthly installments over the coming months or years
- On the other hand, you’ll still need to budget for the monthly amount that you’ll have to save in order to pay yourself back and return your emergency fund to its previous balance. It’s crucial that you’re always ready for a future financial emergency, so plan wisely with this option
Apply For A HELOC
If you’re a homeowner with equity in your mortgage - meaning you’ve paid down the total amount you owe quite substantially - you may be able to pay for your laptop using a home equity line of credit.
- This type of financing allows you to borrow against the equity in your mortgage by giving you a maximum available balance which you can use like a credit card cash advance. You can withdraw funds as you need them
- After you pay for your laptop in cash, you can pay down your HELOC over a predetermined period of time. The interest rate should be lower than you’d pay on a credit card or personal loan
When using a home equity loan, it’s essential to pay your installments on time each month. This will help keep your credit score as high as possible and you’ll avoid negative outcomes like default. Such negative measures could result in foreclosure since your home is the asset guaranteeing the loan.
Use A 0% APR Credit Card
Charging the cost of your laptop to your credit card is another way of financing your purchase. It doesn’t have to cost you a fortune in interest either. If you use a card with a 0% introductory APR and pay the balance down quickly, then you could save substantially.
- It’s important to note that if you still have an outstanding balance on your card when the 0% APR period ends, you’ll be charged interest on this amount on a monthly basis. You’ll want to pay down the amount you owe while your APR is still at zero
- Cards that feature this type of introductory offer are available from major banks, credit unions, and credit card companies. Before you apply for a card, you’ll want to check the regular APR that your account will revert to after the initial period is over. Also, check any fees and additional charges that may apply
Finance Your laptop With A Personal Loan
If your bad credit score prevents you from qualifying for retail financing, you’ll definitely want to consider a bad credit loan to help pay for your new laptop.
- This type of financing product is designed specifically for customers with low FICO scores. You’ll find that lenders in this industry may be more likely to approve your application than traditional financial institutions
- Like all finance products, a personal loan comes with a specific interest rate and other fees that are indicated by the annual percentage rate associated with the loan. These costs will be slightly higher if you have bad credit. However, if you manage your loan responsibly, your FICO score could improve over time
The Bottom Line
Owning a reliable laptop with sufficient processing power is essential in today’s economy. If you need to replace your current computer, the good news is that there are a variety of affordable financing options that can help you pay for your purchase.
Retail financing, HELOCs, drawing from your savings, and bad credit personal loans are all excellent options to consider.