Stores with layaway programs offer the opportunity to snag the items you want for the holidays without paying for it all upfront. This time of year has a lot of expenses that fall outside normal monthly spending, and holiday layaway programs can be helpful for tight budgets.
But layaway stores’ policies on these programs vary quite a bit. Most have fees, others require a deposit, and some have a short window for payment. If shoppers aren’t careful when using layaway, they could rack up fees.
Find out the pros and cons of layaway, and how to best use these programs to your advantage.
Stores with layaway during the holidays
Stores that offer layaway allow shoppers to set aside items that they want to purchase. Layaway stores will usually hold items after an initial deposit on the purchase has been made, and customers pay for the rest of the purchase in installments over time.
You might make an initial payment, but the items stay in the store until you’ve paid the full amount. Some stores have rules about how often you have to make a payment. Others have more flexible programs that allow you to pay what and when you can.
If you’re interested in using such a program, you’ll need to know the stores with layaway. Some of the most popular layaway stores include:
- Toys’R’Us and Babies’R’Us
- Marshalls and T.J. Maxx
- Burlington Coat Factory
- H-E-B Plus
If you plan to use one of these stores’ layaway plans, ask an employee to fully explain their layaway policy to you. Make note of important information like fees or time limits associated with using layaway.
Benefits of using layaway store programs
The benefits of using a layaway program to pay for holiday purchases can be worth it for some shoppers. Here are some reasons why layaway could be a smart way to do your holiday shopping.
Pay what you can, when you can
The biggest benefit is getting to claim a popular holiday item even if you can’t afford to pay for it upfront. Shoppers are guaranteed that they will get that item under their Christmas tree as long as they complete their payments on time.
Lock in sales prices
A layaway program might also be used to take advantage of a special sales price on an item.
Maybe a set of speakers you’ve had your eye on goes on sale for one week only, but you only have enough cash to cover half of the purchase price. Put the item on layaway and it will get rung up at the current sales price, giving you a nice discount.
No credit requirements
Paying with layaway means you can pay for an item over time, a process similar to using a credit card to pay. But unlike a credit card, layaway programs have fewer requirements and are available to all shoppers.
For people with bad credit or an income too low to qualify for a credit card, this can make it a smart way to pay. Stores with layaway don’t perform income or credit checks to use the program.
Avoid paying interest
Even if you do have a credit card, using layaway might still be preferable. Many layaway programs provide up to 90 days to pay for a purchase without interest.
If you carried a balance on your credit card and took three months to pay it off, however, you would get charged interest on that balance each month, adding to your purchase costs. Carrying a balance could also raise your credit utilization, which might cause your credit score to dip.
Use layaway instead, and you can avoid interest costs and any negative impacts on your credit.
Drawbacks of holiday layaway programs
Layaway programs do have a few cons that shoppers should consider, too. Using layaway might not make sense for everyone. Here’s what to watch for.
Fees and deposits
Layaway stores’ policies often include a fee that they charge to layaway items. Toys’R’Us and Marshalls, for instance, charge a $5 fee to start a layaway (though this is often waived during free layaway promotions).
Other stores might require a higher deposit. Walmart, for instance, requires a down payment of $10 or 10 percent, whichever is greater. Burlington Coat Factory requires a 20 percent deposit for layaway. If you’re making an expensive purchase, a 10 to 20 percent down payment may be inconvenient.
If you use a layaway program, beware of cancellation fees. If you change your mind about a purchase or fail to pay it off on time, most stores with layaway will charge a cancellation fee. This is usually between $5 and $10.
Most stores have time limits on layaways, and you must pay for your purchase in full within that time or the layaway is canceled. Marshalls and T.J. Maxx limit layaways to 30 days, while Toys’R’Us gives up to 90 days to pay for the purchase.
Stores with layaway might also place limits on these programs around the holidays. Walmart shoppers only have until December 12 this year to start a layaway contract, and Burlington Coat Factory requires that layaways be paid in full by Christmas Eve.
If you’re unsure that you’ll be able to fully pay for the purchase in the time limit, it might not be a good idea to start a layaway contract. If you fail to meet the requirements, you could face a cancellation fee and lose the hold you placed on the layaway items.
You could miss out on savings
You can use layaway to take advantage of limited-time sales prices, even if you don’t have funds to pay for the item right away. But doing so could mean you miss out on bigger saving that might come later in the season.
This might happen if you make a purchase regularly, too. But if you’re worried about missing a deal, it might be more advantageous to use a credit card.
Many credit cards have price protection. If a better deal on an item comes along within 60 to 90 days of your purchase (depending on your credit card company’s policy), you can get a refund for the difference.
You have to wait
With holiday layaway programs, one of the biggest downsides is having to wait. When you purchase items outright, you own them right away and can take them home. With layaway, you have to wait until it’s fully paid off.
Layaway can be a helpful tool to purchase pricey gifts and is likely a better option than charging your purchases to a credit card. But before buying anything, take a close look at your holiday budget to make sure you can afford the items you want.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.50% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.81% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|