The white goods market or kitchen appliance market is a huge market in the United States and Canada. Many retailers offer great deals at various times of the year to entice you to upgrade your kitchen appliances to the latest fad. They will also offer kitchen appliance installment loans as part of the package to entice you to take the deal. Other consumers are faced with either repairing their kitchen appliances or buying a new set. When appliances break down this presents a big problem for many consumers and whether you buy new kitchen appliances or repair them you are often faced with taking out a kitchen appliance installment loan.
Repair or Buy New
When our kitchen appliances break down and stop working should we repair them or should we purchase new ones? The answer is, well, it depends. For example you are probably looking at a $100 charge just to get the repairman to come and look at your non functioning appliance. Next depending on the age of the kitchen appliance, you may or may not be able to find parts and of course they are expensive. The parts need to be ordered which means that the repairman has to come back another day. Combined with multiple repairman visits and the cost of parts, and time off the job while the repairman does his thing, many of us just decide we want to upgrade and buy a new kitchen appliance.
It might be a fridge , a dishwasher or stove or washer and dryer. But it is not just one appliance. No if you change one appliance, because it broke down, it usually means that you end up changing others. The cost begins to sky rocket! Let’s assume that the fridge breaks down and you buy a new fridge. You want to upgrade and buy the latest design and finish. Many people are going with stainless steel so now you have one appliance that is stainless steel and the others are white or black or worse.
Your kitchen does not look the way you want it and the salesman knows this so he is offering a great deal if you buy three appliances. Now you are considering the fridge, the stove and the dishwasher all because the fridge stopped working. We are starting to look at a serious kitchen appliance installment loan at this point. Combine this with the sales pitch that these new appliances are energy efficient and you are about to sign for your kitchen appliance installment loan!
What Will it Really Cost?
There are multiple decisions along the way to replacing your kitchen appliances, however let’s assume that you have made this decision for a variety or reasons. The next major decision you need to make is how will you finance these appliances? You do have alternatives, some are better than others, but you need to look at the details in order to make an informed decision.
A store kitchen appliance installment loan is often interest free for some period of time and then the monthly kitchen appliance installment payments start. The best part of the deal is that you got to use the new kitchen appliances for some period of time and you did not have to pay anything. The bad news is that the interest rate once it kicks in will be high. Most store sponsored loans carry a high interest rate making your monthly kitchen appliance installment payments much higher than they should be.
As part of your decision process, ask the sales person how much the kitchen appliance loan is going to cost. He should be able to tell you what the total amount of interest is going to be and if there are any registration fees that you will need to pay. Once you have these figures and add them to the original cost of the kitchen appliance you will have the true cost of your purchases.
Installment Loan Alternatives for Kitchen Appliances.
There are other alternatives to consider. You could of course use your credit card, however if you plan to carry a balance for any length of time, the cost due to the high interest charges will be correspond to the store installment loan you were offered.
Using a credit line that uses your home as collateral can be an excellent choice. Typically the interest rate on a credit line is very competitive and if you have the financial room on the loan to handle the kitchen appliances you are purchasing, then this could be a good approach. Your interest charges will be much lower and you have the freedom to pay off the kitchen appliance installment loan anytime.
Of course the best approach to handling kitchen appliance installment loans is to save your money and when you need to purchase appliances, you can pay for them from your savings. At the time of writing, the interest the bank is paying you on your savings is very low, so you may as well use the money for something that is needed instead of paying interest at high rates.
Repairs vs. Kitchen Installment Loans
Finally we want to come back to this issue. Although arranging for repairs is a problem, often repairs can be a cheaper way to proceed. Why? Compare the total cost of your repair including parts and labor with the cost of interest charges for a kitchen appliance installment loan. If the cost of the loan is significantly higher than the repair cost, then you probably should repair the appliance and avoid all of the other costs that creep in, including the cost of the other appliances that you end up replacing.
Emotional decisions can be the most difficult to justify. If you are looking at new appliances and have found something you like, get all of the details including the interest charges associated with the kitchen appliance installment loan. Go home, think about it for several days and consider all of the issues raised in this post as well as your personal situation. Only after you have completed this analysis can you make an informed non-emotional decision. Good luck, we look forward to your comments on this topic.
Disclaimer: The views expressed by this author don't necessarily reflect the opinions of Lazerloan.com, it's owners, or it's affliates.
Conventional Loan Calculator
Enter amount, term, interest, payment periods (14 (biweekly), 30 (monthly), 7 (weekly). Getting a conventional loan is BY FAR and better option than a payday loan or advance.
Thanks for using Lazerloan.com!