At a Glance

Appliances can be expensive. Refrigerators can cost up to $10,000, a washing machine and dryer can cost nearly $5,000 for the two, a range can get up to more than $7,000, and even a dishwasher can cost more than $1,500. Whether you’re renovating your home and replacing multiple appliances or simply replacing one that’s old or no longer works, you may not be prepared with enough savings to cover the cost. In this case, you may turn to appliance financing.

Appliance costs can vary based on their type, size, and functions, as well as the bells and whistles you want. But if you need additional funds to purchase an appliance, a personal loan may be an option. Read on to learn more about:

What is an appliance loan?

There are a few different ways to finance an appliance, but one common way is by taking out a home improvement loan. Home improvement loans are a type of personal loan that are unsecured loans that don’t require collateral to get approved. They have fixed interest rates and monthly payments, and low rates for well-qualified borrowers. Plus, personal loan funds can be used for just about anything, including purchasing an appliance and other home improvement project needs.

A personal loan can be a good financing option if you have good to excellent credit, a low debt-to-income ratio, and an income that can support the monthly payment. When taking out an appliance loan, look for one with a low interest rate and shorter term, around two to five years.

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Credit score required for appliance financing

The credit score required for appliance financing depends on the type of financing you use. For example, to qualify for a personal loan you likely need good to excellent credit (score of 670 or higher). However, you may be able to qualify for in-store financing with a lower score (580 – 649).

There are likely personal loans available even if you have a lower credit score, but keep in mind that if you have a lower score you’ll likely not qualify for desirable terms and be offered a higher interest rate.

Pros and cons of appliance financing

Pros Cons
  • Can replace new appliances quickly
  • Debt that must be repaid
  • Spread cost of appliance over a longer period
  • High interest rates for borrowers with poor credit
  • Interest rates are typically lower than alternatives
  • Fees
  • Fast funding for well-qualified buyers
  • Can damage credit score

Other appliance financing options

A few alternatives to a personal loan for appliances include:

1. In-house financing

Most improvement stores where you’d purchase large appliances, such as Home Depot or Lowe’s, offer in-house financing. Typically, this comes in the form of in-store credit cards. Like regular credit cards, you can charge the purchase at the store to the card and pay it off over time. Not only can this help you break large purchases into smaller monthly payments, but these cards also often have incentives to sign up such as 0% APR for a certain time.

The other benefit to this type of financing is that you can use the card for additional purchases at that store. This can be especially beneficial if you’re doing larger home renovations or need to make multiple large purchases.

Keep in mind that if the card does have a 0% APR offer, you’ll want to ensure the balance is repaid before the introductory period ends. Otherwise, you’ll be charged a high interest rate on the remaining balance.

2. Credit cards

Credit cards offer a lot of flexibility with borrowing money. Depending on your credit limit, you may be able to use your credit card to make appliance purchases. If you have a cash back rewards or travel card, you may even earn points or cash back.

If you don’t already have a credit card you can use and you don’t need the appliance urgently, you may qualify for a 0% APR card which gives you a longer time to pay off the appliance without accumulating interest.

Again, it’s important to try to repay the balance as quickly as possible. Otherwise, you may start accumulating interest at a high rate. Plus, carrying a balance on your credit card can affect your credit score.

3. A 401(k) loan

Borrowing money from your retirement fund is a cheaper option for financing an appliance because you won’t owe any interest, but it could have an impact on your retirement savings and long-term plan.

Most 401(k) plans allow you to borrow a certain amount of money from yourself, but the amount you take out will not be earning anything additional while it’s gone. Some plans also restrict how much you can pay into your retirement fund until the loan is completely repaid. Check with your plan to learn more about your specific options.


A home equity line of credit (HELOC) allows you to essentially borrow against the equity in your home. This is a revolving type of secured loan in which the lender will loan the borrower a certain amount within a specific term, and the borrower can use funds up to that limit on large purchases. Then, they repay what they’ve borrowed (like a credit card). While HELOCs typically have high credit limits and low-interest rates, you’re using your home as collateral, so you risk losing it if you don’t repay the funds.

5. Lease

Like leasing a vehicle, you may be able to lease your appliance. In this case you’d get the appliance and make monthly payments, and after a certain period (typically 12 or 24 months) you can decide to stop payments and return the appliance or continue paying until you own it. Because this option doesn’t require a down payment or credit check, it can be an option for borrowers with poor or no credit.

However, leasing an appliance often comes with additional fees that can increase the total cost.

When can I use appliance financing?

There are a few situations you may find yourself in that would require appliance financing:

1. When making home improvements

Whether upgrading one room or flipping your entire home, one way to quickly improve your space and add to its resale value is by installing new appliances. Not only do they typically look better, but they will operate more efficiently and effectively.

Overall, new appliances are often more energy-efficient than the ones they are replacing, which can reduce your energy bills and cost less in the long run. This can be one benefit to taking out a loan to replace your appliances, because while you pay more in interest, you may be able to save more in energy savings.

Plus, according to data from Consumer Reports, a renovated home with new appliances can increase your home’s sale price by 10% or more. The quality of appliances in your home speaks volumes to prospective buyers.

2. When relocating

Sometimes, new apartments or homes don’t come with all the appliances. Refrigerators and washers/dryers are the most common appliances not included in the unit, meaning you must purchase them on your own. On top of the cost of relocating, this can be an added financial burden you may not be prepared for. In this case, getting an appliance loan can be helpful.

3. When making large appliance purchases

If an appliance breaks or you just want to upgrade, large appliance purchases can cost thousands of dollars. If you don’t have enough in savings and other options aren’t available, you may want to finance the appliance. This helps to ensure you can get the new appliance quickly and pay for it over a longer period, potentially putting less of a strain on your finances in the short term.

Where can you get a personal loan for major appliances?

There are three primary places you can get a personal loan for purchasing an appliance: Banks, credit unions, and online lenders.

Banks Banks typically cater to borrowers with great to excellent credit scores, or those who are already existing customers. They often have the strictest requirements, but they also offer lower interest rates for borrowers with excellent credit.
Credit Unions While you must be a member of the credit union to apply for a loan through one, this can be a great option for borrowers with good or poor credit because they often have less strict requirements and take factors other than your credit score into consideration. They may also have lower interest rates for well-qualified borrowers.
Online Lenders Online lenders typically offer the most flexibility when it comes to qualifying for a loan. These lenders cater to borrowers with all credit scores, and the application, approval, and funding processes are often faster than other options. They also typically have the lowest interest rates for borrowers with excellent credit.


Whether you should finance an appliance depends on your personal financial situation. Having a great or excellent credit score, low debt-to-income ratio, and steady income can help ensure you get a loan with lower interest rates and better terms. Otherwise, you may want to explore other financing options that may fit better in your budget. Or consider taking time to save enough to purchase the appliance.

If you can, paying for appliances up front will save you money and help you avoid damage to your credit score. However, this isn’t always an option. If you can’t afford to pay for an appliance up front, consider an appliance loan or other type of appliance financing that will allow you to spread the payments over a period of several months or a few years.

When you first apply for an appliance loan, it will trigger a hard credit inquiry. This will decrease your score by a few points for a temporary period. If you continue to make your monthly loan payments, your score should rebound and even improve. However, missing payments can significantly damage your score.

According to experts, the best time to buy appliances is when new models roll out: washers, dryers, and dishwashers come out in the fall (September and October), refrigerators in May, and ranges/ovens in January. When the latest models are unveiled, many stores put older models on sale. Historically, holiday weekends like Memorial Day and Labor Day also often have sales.

Purchasing appliances as a package does often come with cost-savings, often keeping hundreds or even thousands of dollars in your pockets through discounts and rebates. In fact, by purchasing three or more appliances in a bundle, experts estimate you could save up to 20% of the final cost. Keep in mind this depends on the store and the appliances.

Big-box retailers like Home Depot and Lowe’s typically have a large variety of appliances and will often have sales. Other places like Costco offer low warehouse prices on name-brand appliances. Check for other warehouses in your area, or retail locations, that may have appliances on hand.

While you need a good to excellent credit score (670+) to qualify for the best personal loan conditions and lower interest rates, you may still be able to qualify for an appliance loan if you have poor credit. Some online lenders and credit unions will extend personal loan options to borrowers with bad credit, but you’ll likely have a higher interest rate.