How to Finance Your Laptop: Everything You Need to Know

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Although you can get a decent laptop for a cheap price, higher-end models can get costly real quick. In response to buyers' needs, a number of retailers offer financing plans that make expensive laptops more affordable, as long as you can pay over time.

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However, when it comes to financing, there's always a catch. Here's a list of pros and cons that come with financing a laptop, as well as the financing services provided by large retailers. 

The Good

  • You don't have to drop a lump sum to get your hands on a pricey laptop.
  • It’s not necessary to rely on bank loans or traditional credit card services.
  • Many retailers offer zero-interest rates, rewards, flexible payment structures and other perks.
  • Device upgrades are sometimes included in financing plans. 

The Bad

  • Financing is risky; missing a payment can result in a penalty and high interest rates.
  • Zero interest can reflect poorly on a credit score:
    • Financing through a retailer means a store credit card is opened in your name for the exact amount of the purchase. The store maxes out the credit limit, which ramps up your credit utilization. Thirty percent of your credit score is based on your utilization ratio. Low payments are attractive, but zero interest is stagnant debt that can drag down your score if you let it sit over 12 months.
    • Financing isn't just a payment plan given out freely; you're applying for a new line of credit, which means a hard credit inquiry by a retailer can lower your credit score. More harm is done if you're requesting new credit several times in a short period of time. These inquiries stay on your credit report for up to two years and can hurt your score during the first 12 months if you're not careful.
    • Financing means a new account is opened for the amount of your purchase, which, in turn lessens the average age of your credit file. The length of your credit history is about 15 percent of your credit score. This means your credit score will take a dip after your new purchase is reported to credit agencies.
  • Limitations apply for those without pre-existing credit or steady income.
  • Promotion terms aren't always transparent, according to the Consumer Financial Protection Bureau.

Laptop Financing Services

Amazon

Amazon provides special 6- and 12-month financing for shoppers making purchases with an Amazon.com Store Card. Laptops that cost over $149 are subject to 6-month financing without interest, while laptops priced higher than $599 are eligible for zero interest if paid off within the year.

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Select Amazon-sold items are eligible for 24-month financing. Interest (minimum charge $1.50) will be applied to your account from the purchase date if the promotional balance is not paid within the time frame selected. Monthly payments must be met to receive these promotions. Non-promotional purchases and voided promotions under the Amazon.com Store Card are subject to variable 26.99 percent APR. 

Apple

Apple has various financing plans for business, education and consumers that can be applied to MacBooks. Special perks are included with each financing program, such as two-year device refreshes with AppleCare support for businesses, and flexible cost-sharing that provides upgrades and third-party products for institutions.

shutterstock_112901404Apple also offers zero-interest repayment for consumers, ranging from 6 to 24 months, through the Barclay Apple Rewards Card. Interest (14.99 to 27.99 variable percent APR) will be charged to the account from the purchase date if the balance is not settled by the end of the promotional period. Apple Financial Services also offers customizable financing options for your budget and technological goals, including delayed payment structures, trade-in and recycling services.

Best Buy

Best Buy offers storewide 6 and 12-month financing that can be applied to the laptop of your choice, provided that its price is over $199 or $399, respectively. For these promotions, interest is deferred until the promotional period's end.

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If the balance is paid in full by the end of your financing terms, no interest is charged. But if you fail to do so, the accumulated interest will be charged to your account with a 9 to 28.99 percent APR depending on your creditworthiness. Minimum monthly payments must be met, but you will probably have to exceed the minimum listed on your statement to pay the laptop off completely without interest. 

Dell

Dell provides a number of special financing options for its many laptop brands and series, some of which include Alienware, Inspiron and XPS. The financing periods range from 6 to 12 months for purchases over $599 and $899, respectively. All promotional offers are available for no interest if they're paid in full prior to the end date.

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If the balance isn't settled by the promotion's expiration, interest will be charged to your account from the transaction posting date at variable 19.99 to 29.99 percent APR. Dell also offers Preferred Account financing through WebBank for U.S. residents, where charges are 3 percent of the new balance or $20 on a monthly billing statement.

HP

HP has a Premier Upgrade Program in which shoppers can split the cost of an Envy or Spectre laptop within 24 months at zero percent APR via Citizens One. Interest or other fees may be applied to late payments or unpaid balances from the issuer of your credit card based on prior agreements. 

shutterstock_418455928Once your laptop is paid off during the promotional period, you're free to upgrade to a new device under the same financing terms. The program also includes accidental damage protection, unlimited access to personalized support, hassle-free setup and migration. If you choose to not renew your membership after the 24-month period, you will lose access to damage coverage and HP Premier Support.

Lenovo

Lenovo provides laptop financing through WebBank and Swedish payment servicer Klarna, which offers 12-month, zero-interest payment plans for purchases between $299 and $799, and 9.99 percent APR on purchases over $799. 

MORE: The Best Laptops for Business and Productivity

Late and returned payment fees are up to $35 depending on tardiness and impending balance. Business customers are also eligible for promotional pricing, but non-promotional purchases are subject to standard 19.99 percent APR (no less than $2 interest per month). Additionally, Klarna allows automatic credit-line increases for those who qualify.

Microsoft

Microsoft is another major brand that's joined forces with Klarna, in this case to roll out the new Surface Plus program, in which shoppers are provided 24-month financing on all Surface products for zero percent APR. For late payments, 19.99 percent interest is charged, plus a $35 fee.

Through Surface Plus, consumers can get their hands on a Surface device starting at $34 per month, along with personalized support and 18-month upgrades. There's a pricier and enhanced Surface Plus for Business program that's financed by LiftForward and provides 18-, 24- or 30-month payment cycles with upgrades available after 12 and 18 months. Microsoft also has a flexible Surface as a Service leasing plan and other financing programs with third-party providers.

Newegg

Newegg has storewide financing that can be applied to the laptop of your choice with the Newegg Store Credit Card. No interest is charged on $199 to $498.99 purchases paid in full by 6 months or purchases above $499 paid in full by 12 months.

shutterstock_562746820On select items, Newegg provides extended financing for up to 18, 24 and 36 months at zero interest. However, if you fail to pay off your balance at the end of the promotion, you'll have the accumulated interest from the purchase date at 29.99 percent APR (minimum $2). Monthly payments must be met to upkeep your selected promotion, and higher payments may be needed to pay off the balance within the promotional period.

Origin

Origin offers a financing program of up to 36 months on systems above $1,000, which includes all of its EON gaming and professional-grade (NT, NS, N7) laptops, as well as accessories. At a fixed 16.99 percent or variable APR depending on creditworthiness, Origin makes high-end laptops accessible to U.S. residents on a budget via GetFinancing. 

MORE: The Best Laptops for Every Need

Payment terms are set by participating GetFinancing lenders based on credit amount, limit availability, calculated interest, grace period and balance. Assorted fees are also determined by the lender, including annual membership, late payment, over-the-limit, returned and bounced checks, and more.

Bottom Line

Financing can be helpful, but it works out only if you're confident that you can pay the balance in full in a timely manner. One slip up, and you'll be hit with hefty fees, interest and a potentially damaged credit score. If you're good at scheduling payments, budgeting and appreciate the additional perks retailers throw in, financing can very well be worth the effort, especially when it comes to zero interest.

You also need to determine what kind of laptop you're getting and whether you're willing to upgrade within a year or two, which often calls for a new financing plan to shell out cash for. All in all, if you're going to finance, read your terms carefully before agreeing to anything. It might just save you from the temptation of "buy now, pay later."

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