Many people will set their sights on something in a shop window and choose to go get a loan in order to make that item theirs, but there may be a better way to acquire it. Snap Finance loans are unlike any you’ve probably seen before. They combine the best parts of standard loans and in-house retailer financing to provide a solution for people struggling to make big purchases.
What You Need To Know
Snap Finance is an unsual lender that specializes in providing pseudo-loans for people looking to buy certain items on credit. You could be approved to borrow up to $3,000 to be spent on a purchase at one of a handful of specific stores in a sort of rent-to-own agreement. It is recommended that you browse the selection at some of those retailers before you apply so you know what you’re getting into; in fact, it could be very helpful to choose the exact item or items you want ahead of time. You need to know whether the amount you’ve been approved for will suffice to purchase those selections, because there’s no point in taking the loan if it does not. You also want to be sure that you can find what you want at the store to begin with, since that is not a guarantee.
Whether or not you are successfully approved will depend on a combination of factors including your credit score (although it’s a minor part of the process), your income and your job status. Snap Finance says they are proud to work with people who get turned down from many other lending institutions for various reasons, and they claim to have a success rate of over 80% for their applicants. You shouldn’t have any problem with getting approved, but as we’ll discuss, it can be difficult to figure out how these loans can be worked into your budget; you may want to pause the process there for a while to give you time to figure out if you can really afford them or not.
The costs of these loans can be a bit difficult to predict due to the unique way this lender has things set up. Instead of actually loaning you money, they purchase the item(s) you shop for on your behalf and you then rent the itme from them for 12 months. During this time, you are paying for the rental and making payments toward purchasing the item from Snap Finance yourself. The former fees are called lease fees and take the place of interest charges – they also vary drastically depending on your financial profile and what you bought. The second should add up to the total cost of the item by the end. There is no easy way to predict what your costs will be, so be sure to review the specifics of your individual offer in the paperwork you are given before you agree to this loan.
After your approval notice comes through and you accept it, you will be given a card that is already loaded with your funds and will allow you to spend them at any of the partner retailers that this lender works with. A full list is available on their website and may be included in their loan documentation. You can get your card in either physical or digital form (a barcode you can display on your smartphone and scan when shopping to purchase), and once you have it, all you’ll have to pay right away is a processing fee that Snap says usually amounts to $59 or less. The rest of your loan is not considered to have started until you actually spend the money you have laid claim to. This means that if you want to wait a little while to make your purchase, you should not owe any leasing fees in the meantime.
Spending and Repayment
Before you get this kind of loan, you should know some of the details about how it works. You can only spend this money to purchase items from certain merchants, but if you sought out a loan like this, it is reasonable to assume that you already have your eye on a particular item (or at least have a need for some specific type of item like a couch or a bed). If you do, you aren’t likely to care whether or not you could technically have spent that money on something else. You should still keep in mind that you cannot spend this money on bills, food, car repairs or any other necessities that you might suddenly need – only consumer items. You also cannot shop for those items elsewhere, even if you like the products at a different non-partner store better or can find a better deal to make your money go further. You can also only make purchases in a single transaction, because your card will not work after your first use of it. This means that if you end up spending less than what you anticipated, you won’t owe the full amount you were approved for, but you also won’t be able to access those excess funds for anything else.
Your loan repayment will happen over the course of the next 12 months after that, and you’ll be paying some of your lease charges every month as you go. However, there is another option to help you save. If you think you can reasonably get the money together in a little over 3 months, you can opt to try to use the 100-Day Cash Payoff offer. This allows you to have all your lease charges waived if you can completely pay off your balance in those first 100 days. It’s a challenge, but this is the best way to do things if you can manage it.
Why Choose Snap Finance For Your Borrowing?
Because these are slightly unusual loans with a surprising amount of restrictions, leasing a purchase through Snap Finance might not initially seem like the best idea. Why jump through all those hoops when you could just get a standard loan and be done with it? These loans might not be unrestricted like most other similar financial products, but with the right mindset, that can be an asset to you. There are a few things to like about how this lender does things that you won’t find anywhere else. Here are some of the high points:
- Having limited spending options forces you to keep focused and spend in ways you intended.
- You can’t overspend without trying to fit an extra item into your limited budget in that one trip, since the funds are stored on a one-time use card.
- You don’t need any credit (good, bad or otherwise) to be approved, so you might have an easier time qualifying for this than for a traditional loan.
- You won’t necessarily owe as much as you were approved for if you don’t spend all the money you are allowed to.
Will You Be Happy With Snap Finance?
The best way to tell if a lending company is truly as good as it looks is to examine the reviews you can find about them. Snap Finance publishes reviews from their customers right on their site, making it easy to find some truthful opinions from real people without having to go looking for them. All of these narratives are glowing and detailed, telling you how these loans were able to change the borrower’s life for the better and how pleased each client was with the outcome of their decision.
Now, just because the picture painted by these published reviews is very positive doesn’t mean that this is the unanimous opinion of all users, however. It wouldn’t make much sense for the company to host an angry or unfavourable review on their site like that, as it might make someone reconsider doing business with them. Those reviews are probably still out there, just in less visible locations that aren’t specifically given prominence. Their Trustpilot reviews, however, are also quite good as a whole with a 5-star rating of just over 70%, so the true picture is likely not far off. This is a well-liked service that makes it possible for people to make the purchases that really matter in their life, and by all indications it doesn’t seem to be hiding anything in the fine print.
So Should You Turn To Snap Finance?
Even though Snap Finance loans are only good for people in very specfic situations, you can get a lot out of them if you go in with the right expectations. They’re great if you know you need a lot of structure to keep you from failing to use your loan responsibly, since it’s not possible for you to fall into many of the common pitfalls that get people into trouble. The only downside is the expense. These loans can end up costing you quite a bit more than buying the items outright or even taking out a conventional loan for them. That said, they can also cost less than traditional loans in some cases. You know best what will work for you – if what we’ve written about here appeals to you, you’re likely to come away satisfied.