Snap Finance offers lease-to-purchase options for a variety of products, from computers to furniture. You can take your item home immediately, make your payments, and own it outright at the lease’s end. This Snap Finance review explores the process, advantages, and risks to help you determine if it’s the right financing choice for you.
Warning: On July 19, 2023, the Consumer Financial Protection Bureau (CFPB) announced a lawsuit against Snap Finance, accusing the company of misleading advertisements, insufficient disclosures, and interfering with consumers’ ability to understand the terms and conditions of its financing agreements, along with misrepresenting consumers’ payment obligations and making false threats in collections.
The allegations have yet to be proven but they are extremely serious, and given this information we would strongly recommend not doing business with Snap Finance.
Snap Finance
Snap Finance will finance purchases for people new to credit or those with bad credit. This is a highly accessible form of financing, but the costs may be high.
There’s a pattern of customer reviews describing extremely high costs, often involving payments over double the cost of the original purchase.
Pros
Quick online application
No collateral
Bad credit borrowers are approved
Same-day decision and approval
Choose your own local retailer
100-day payment option to pay off your balance faster
Payments auto-debit from your checking account (which can help avoid late fees)
Cons
No transparent fee structure
Very high cost of leasing
Your payments are not reported to the credit bureaus
No grace time for payments
Hard credit inquiry
What Is Snap Finance?
Snap Finance is a lease-to-own provider based in Salt Lake City, UT. Snap Finance Merchants helps people obtain financing for things like:
- Furniture
- Mattresses
- Tires and Rims
- Jewelry
- Electronics
- Appliances
🤔 What is lease-to-own financing?
Furnishing a home can easily cost thousands of dollars. Other costly items like replacement tires for your car or appliances can present financial challenges if you don’t have the cash on hand.
Lease-to-own financing allows you to borrow the cash you need to obtain the items on your list, even if you have bad credit.
Instead of going to a lease-to-own retailer directly, you can apply at stores, even if you have bad credit or no credit. You can only use Snap Finance at stores that work with Snap.
You can finance merchandise with up to 18 months of payments. There is also a 100-day payment option that helps you pay off your purchase in less time.
Requirements to Qualify For Financing:
- Be at least 18 or older
- Have an active checking account
- Have a steady source of income
- Have a valid email address or cell phone
Snap Finance will perform a hard credit inquiry, but the inquiry may not show up on your Equifax, TransUnion or Experian credit report because Snap pulls credit from smaller credit reporting agencies such as Clarity and DataX.
Snap Finance is widely used by automotive repair businesses, allowing customers to spread out the costs of expensive car repairs.
How Does SnapFinance Work?
Snap Finance Stores makes it easy to apply for and receive financing online. Just make sure you meet the minimum requirements before moving forward with these 3 steps.
Step 1: Apply Online
The application is online. It just takes a few minutes to fill out the form and you’ll submit your personal information along with your social security number and driver’s license number.
Snap Finance can approve your application in just minutes.
Step 2: Choose a Retailer
Once you get approved, you can choose your store and start looking for items up to $5,000, depending on your approved credit limit. SnapFinance partners with retailers all over the country so you can shop locally and use your approval to lease your items. There’s a store locator feature on their site so you can easily find your nearest retail partner option.
Step 3: Check Out
SnapFinance will send you an email with the amount you are approved to lease once your application is approved. All you need to do is show it to your cashier to proceed with the transaction. Your payments will be automatically deducted from your checking account.
How Much Does Snap Finance Cost?
Snap Finance does not share specific costs for their lease-to-own agreements anywhere on their site. However, they do speak to what some customers can expect in terms of interest or fees.
There will be a processing fee or initial payment due during the day you make your transaction. This amount can vary depending on the specifics in your lease agreement but compare it to a down payment.
Snap Finance does not charge interest on a lease-purchase agreement. However, that does not mean that you won’t pay more than the purchase price of your item(s). As with all lease-to-own companies, there is a cost in addition to the purchase price that will be added to your monthly payments.
👉 For example: If you choose to lease a laptop that retails for $600 and started making $40 payments every 2 weeks for 12 months, you’d pay close to $1,000.
So while the payments are not called “interest”, you’re still paying more money for your lease-purchase agreement.
Some other costs and fees you may want to consider include:
- Application fee and processing charges
- Late fees
- Missed payment or non-payment fees
Snap Finance does not clarify what the cost of financing is, but many users report paying extremely high costs.
⚠️ Warning: Your total cost could be more than double the cash price of the merchandise.
Snap Finance Reviews
Snap Finance formerly had a B rating with the Better Business Bureau (BBB). That rating has now been revoked, and Snap Finance is currently unranked. The BBB makes it clear that the rating was revoked due to the CFPB lawsuit against Snap Finance.
The customer reviews remain, and Snap Finance gets 4.41 out of a possible five stars from over 1,118 customer reviews. The company has been in business for the past 11 years.
On Trustpilot, Snap Finance gets 4.5 out of 5 stars from 7,462 reviews.
Positive reviews consistently state that the service delivers as advertised and does what it’s meant to do. Some examples from Trustpilot:
The majority of the reviews are very positive, but there is a significant minority of extremely disappointed customers. Some examples from the BBB complaints page:
Snap Finance does appear to be responsive to online complaints. Complaints are typically answered by the company, and there does appear to be an honest effort at resolution.
Several complaints involved auto repair situations where dissatisfied customers want to rescind a payment for work that they consider unsatisfactory. This is a complex situation in which the financing service has to manage divergent claims from the customer and the provider.
Some complaints may also come from customers who did not fully understand the deal they made.
☝️ One thing that Snap Finance Stores does recommend that we believe every borrower should do is carefully review the disclosures of the agreement before you sign and agree to anything. Make sure you understand your payment amounts, when they’re due, how much you’d pay over time, fees, and additional unique terms of your agreement.
Snap Finance Review: Final Take
Snap Finance looks beyond a borrower’s credit history when considering them for short-term financing. While their process is easy and flexible, getting financing can be a costly decision.
Snap Finance does not report your payments to the three major credit bureaus. This financing option is not a credit-building opportunity that could help you qualify for better loans in the future.
There are very few purchases that you need badly enough to risk the prospect of paying more than double what the item actually costs.
FAQs:
You can use Snap Finance at over 200,000 locations across the U.S. Use their store locator search tool to choose the store you want.
To use Snap Finance, you need to apply online by filling out the form and submitting your personal information along with your social security number and driver’s license number. After you’re approved, you can choose your store and start looking for items up to $5,000, depending on your approved credit limit.
Snap Finance can be used at over 200,000 retailers across the United States. Most Snap Finance stores sell the following:
– computers,
– mattresses,
– electronics,
– furniture,
– jewelry,
– wheels and tires.
It’s actually better for you to pay Snap Finance off early because that means a lower cost, as no interest will be charged. If you pay Snap Finance off within 100 days, there is no interest charge.
