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Many millennials struggle with debt. Whether they’re paying off student loans or a mortgage, debt is a common denominator among many young people. Others may even have credit card debt to add to the mix. However, you may find yourself needing new furniture for your home. If your credit is bad, how can you afford this purchase?

Most major furniture stores offer financing to their customers. These deals sound very promising. During certain times of the year, you may be able to qualify for zero interest on a loan. Others may offer deals meant just for those with bad credit scores. Before you sign any contract however, be sure to do your homework to determine if the deal is fair or too good to be true.

  • Warning about zero interest

If you’re ready to buy new furniture on a zero interest plan, make sure you read all of the fine print. These sales often promise zero or low interest rates for a set period of time, often 12 months. While this sounds like a great way to furnish your home, it’s only a good deal if you can always make the payments on time.

What you may not realise is that these loans often come with a deferred interest clause. This means if you’re unable to pay the balance in full by the maturity date, you will be responsible for paying interest on the entire loan, starting from the date of purchase. Deferred interest also kicks into action if you pay late or miss a payment.

  • Be wary of second chance deals

If for some reason your credit isn’t good enough to qualify for regular financing, the store may try to offer you a second chance deals. However, since you’re considered a loan risk, these ‘deals’ are often full of hidden fees. Many times, these ‘alternative’ deals come with high interest rates from day one. Introductory rates are rarely offered. You may even face huge penalties if you ever make a late payment. Paying off these predatory financing deals takes a lot longer, and it would be wiser to take a few months to save up enough cash to make the purchase instead.

  • Don’t be tempted by rent to own

Large furniture stores are willing to take a risk on those with even the lowest credit ratings. Many do this by offering a rent to own plan. Under this type of deal, the buyer agrees to pay a set amount each week or month for a specific amount of time, often for a year or more.

While the weekly payments may seem low, they add up quickly. Let’s say you want to purchase a sofa for £600. You may be asked to make payments of only £30 for a period of 52 weeks. That seems like a great bargain until you do the math. Instead of paying £600, you pay a total of £1560 for the same sofa. That’s more than double the price!

  • Get a personal loan

The best place to obtain a loan, no matter your current credit rating, is from a bank. If you already have a relationship with a local bank, that’s even better. Personal loans often come with lower interest rates and easier-to-understand payback rules. You’ll simply pay back a certain amount each month until the loan is paid in full.

  • Improve your credit

It may be wiser to try to improve your credit before you attempt to finance new furniture. By postponing your purchase and working to improve your financial situation, you may be able to get better interest rates on a loan.

It’s not difficult to raise your credit score, but it does take some time. Start by paying all of your bills on time. Whenever possible, pay more than the minimum. If you have credit cards, use them less often. Try to pay off any current debt as quickly as possible. By following these steps, you’ll be able to obtain better financing on your furniture purchase.