DO KITCHEN CABINET & REFACING COMPANIES OFFER FINANCING?
By Jenny Cazares
Some kitchen cabinet companies offer in-house financing. One example is Greensky.
It is always important to read the fine print before moving forward with any company. Interest rates could range from 17%-29.99%. These types of loans are unsecured loans.
Will cabinet companies “bait and switch” financing options?
Some cabinet providers may “WOW” you with a 0% interest rate offer for applying with their financial partner, in order to get you in the door. The 0% option would typically apply to a customer who has an excellent credit score.
You may find that after you apply with an in-house financing company, the 0% rate is not what you receive.
The bait & switch is used to influence your choices in three steps:
- You are led to make a decision based on what is offered to you.
- You are informed of the impossibility of receiving that offer.
- A new, but less rewarding offer is then proposed.
This is a sales tactic to get you in the door and possibly run your credit report for financing. Often a customer may receive a higher interest rate and feel pressured to take it. They might feel that running another credit report, with a different provider, might lower their credit score. The customer may be told or believe, that this is the best rate or price they will get, anywhere.
What kind of loans are available for kitchen cabinet financing?
Kitchen cabinet financing is either an unsecured or a secured loan. Some companies may partner with 3rd party lending companies, such as Greensky. With a company like this, one can apply online, directly from the cabinet company’s website, or in-person with the finance department. Be cautious if you choose this option, and make sure you read the contract thoroughly.
Some companies may charge the total cost of your new kitchen upfront before the project has begun. Others may charge half upfront, and the rest upon delivery, whether they have completed your project or not. Most importantly, make sure you are receiving a fair interest rate. Review the overall terms of the loan, instead of working with a company that asks you, “how much of a monthly payment can you afford”?
Never tell a salesperson how much of a monthly payment you can afford. A salesperson may try to maximize their profit, by artificially lowering your payment, and extending the life of your loan, or requiring money down.
What is an unsecured loan?
Unsecured loans, such as personal loans, do not require collateral. The lender will base the loan on creditworthiness to repay the loan. They are considered a higher risk, therefore the interest rates may be high. You typically would need good credit to be approved for this type of loan.
What is a secured loan?
A secured loan requires collateral such as financial assets you own, like a home or a car. The lender can collect full payment (via your financial assets) if you fail to pay your loan. In exchange for the collateral, lenders may offer lower interest rates, higher loan amounts, and longer terms.
A home equity loan is a secured loan, and lenders may allow you to borrow up to 80-85% of the appraised value of your home.
Does Dean Cabinetry offer in-house financing?
No, Dean Cabinetry does not partner with any financial institutions for financing cabinetry. We have chosen to not be involved in financing partnerships with 3rd party lenders. The reason for this: if the client is not happy with the lending institution we referred them to, we do not want that to reflect poorly on our business. We prefer to advise our customers to speak with their local bank for a personal, or home equity loan if needed.
Should I get a personal or home equity loan to remodel my new kitchen?
It’s always smart to talk with your local bank first, for a personal or home equity loan, if you need to finance your project. You already have a relationship with your bank, and they are there to help you.
Your bank may even offer lower interest rates. This loan will allow you to have the available funds in hand when selecting the right cabinet partner for your project. It will also ensure that your final payment is made when your installation is complete.
How do I protect myself when choosing a company that uses its own financing company?
If you are considering a financing company, read the reviews for the financing company and the cabinet partner. Read what customers have to say about their products and services. I would also suggest researching the company with the Better Business Bureau and seeing if there have been any complaints filed against the company.
Deciding to remodel your kitchen is both exciting and a little nerve-wracking. Never feel rushed in making a decision. After all, a kitchen remodel is a big step and you want to review all of your options and do what’s best for you and your family.