Repairing or replacing home appliances with a payday loan

When an essential home appliance breaks down and you don’t have an emergency fund to fall back on, it can be difficult to know where to turn. Should you ask friends and family for support? Are payday loans a common option? Or is another form of short-term credit a better idea?

In this guide, we explore what to do when a home appliance breaks down, from quick DIY fixes to knowing when it’s time to look for a replacement. We also outline various finance options, from overdrafts to salary advance schemes.

In this guide: 

•  Should you repair or replace your appliances? 
•  Funding options for home appliance repairs
•  Top tips for managing unexpected expenses
•  Where can I get free financial advice?

Should you repair or replace your appliances?

If an important appliance has called it quits, debating whether to repair or replace it can take some consideration. As a broad rule, if the repair cost is more than 50% of the price of a new appliance, replacement is typically a more sensible option. But before rushing into buying a new appliance, it’s worth checking whether the issue can be resolved yourself.

Small problems, like blocked filters and broken seals, can often be sorted with DIY repairs. For instance:

• If your tumble dryer won’t complete a full cycle, check and clean the lint filter.
• When your fridge isn’t cooling properly, a clogged drain inside it might be the issue.
• If your oven isn’t heating properly, a faulty door seal could be the culprit.

If you’ve checked the basics and still can’t identify the problem, it might be time to call a professional. Double-check your service plan at this point too. If repairs and replacements are covered, this could save you spending on repairs.

Alternatively, if your appliance is coming to the end of its lifespan, replacing it might be a smarter move. Older models typically use more energy, meaning higher utility bills. While it might be expensive upfront, newer energy-efficient appliances could help save you money over time.

Funding options for home appliance repairs

For many, payday loans can help offer a practical solution when facing the dilemma of whether to repair or replace broken appliances, but are they the best option for you?

Here are several ways you could potentially cover the cost, including some payday loan alternatives:

1. Short-term or payday loans

When your washing machine stops working or your boiler breaks down in the winter, a short-term appliance loan could help you access the cash you need. When used responsibly, flexible, short-term borrowing can be a helpful option if you don’t want to use your savings, or your funds are running a little short until your next payday.

Payday loans can often be approved and funded the same day, provided you pass the lender’s credit and affordability checks. However, responsible borrowing is crucial, so you should only ever apply if you’re confident you’ll be able to comfortably meet the repayments.

2. Appliance financing

While payday loans can provide the quick cash you’re looking for, there are various alternatives to consider too. For instance, instead of paying the full cost upfront, appliance finance allows you to spread payments over several months. Some retailers even offer 0% interest deals for a fixed period.

This can be a budget-friendly way to replace your appliance, but you’ll need to stay on top of your monthly payments to avoid extra fees. Missing credit repayments can also damage your credit score for up to six years, so it’s important to stay on top of your repayment plan.

3. Buy Now, Pay Later

Buy Now, Pay Later (BNPL) schemes can also help if you’re looking at a new appliance rather than a repair. With BNPL, you’ll usually pay an upfront deposit, then defer or spread the rest of the payments over a set period.

Our guide on Buy Now, Pay Later and bad credit explains how these schemes work, as well as who’s eligible to apply.

4. Authorised overdrafts

If you’re looking at a smaller amount to cover an appliance repair, dipping into an authorised overdraft can be a flexible, short-term solution to help bridge a gap in funds. Some banks even offer interest-free buffers. You’ll just need to check your repayment terms carefully to avoid any unexpected charges.

5. Borrow from friends and family

Looking to avoid high-interest credit? A personal loan from a friend or family member is another option to consider. While this may not be feasible for everyone, it’s one of the simplest and least expensive ways to borrow.

Be clear about how much you need and when you’ll be able to repay it by. It’s always a good idea to keep communication open to avoid any misunderstandings.

6. Salary advance schemes

Some employers offer salary advance or wage advance schemes, allowing you to access a portion of your salary before your typical payday. This can be useful if you need the funds urgently but want to avoid credit options like payday loans.

Not all employers offer salary advance schemes, but it’s still worth checking if you think this sounds like the right option for you. Our guide to how to ask your boss for a wage advance outlines the key considerations to bear in mind.

Moneyboat’s top tips for managing unexpected expenses

Whether it’s paying a surprise bill, failed MOT costs, or repairing a broken appliance, unexpected expenses can catch anyone off guard. With this in mind, here are some tips to help you manage them more smoothly:

1. Carefully review your options: While it’s easy to panic when an essential appliance breaks, try not to rush into a decision. Take some time to weigh up the pros and cons of each funding option carefully.
2. Create an emergency fund: Small, regular contributions into an emergency fund can help reduce the impact of future financial shocks. Our guide on how to save for an emergency fund is filled with all the tips you’ll need, including how to set realistic goals and stay on track.
3. Review your budget: Reducing non-essential spending can free up some funds to cover urgent costs. You can explore our guide on managing your personal cash flow for help with tracking expenses, budgeting, and more.

Where to get free financial advice

If you’re feeling overwhelmed or you’re unsure about your next steps, there are various third-party support charities and organisations on hand to help. The following organisations can help you understand your options:

• StepChange: Offers free debt advice, including help with budgeting, repayment plans, and more.
• Citizens Advice: Provides guidance on budgeting, employment, and benefits.
• MoneyHelper: A government-backed resource for free money and pensions advice.

Explore more helpful resources

When a household appliance breaks down, it’s normal to feel stressed, especially when money is stretched. Whether you choose to repair or replace your home appliances, hopefully you’re feeling more confident about the different finance options available, as well as which route might be right for you.

If you’re looking for more helpful resources, you’ll find plenty over on the Moneyboat blog.