When you need something now but can't pay all at once, you have choices. Lease-to-own vs. layaway vs rent-to-own programs all promise ways to shop without perfect credit. But they work very differently.

If you're tired of being turned down for credit cards or loans, these programs might work for you. Each option has pros and cons. Some let you take items home right away. Others make you wait. And the costs over time may differ.

This guide breaks down all three options so you can make the right choice for you. Learn how each program works, what the costs are, and when each one might make the most sense for your situation.

What is lease-to-own?

Lease-to-own financing is typically available on durable goods, such as furniture, appliances, electronics, mattresses, and tires.¹ In a lease-to-own agreement, the merchandise is generally available immediately or quickly delivered, making it a convenient option for essential items, such as appliances, that are hard to live without.

Snap Finance is a leading provider of lease-to-own financing. How does it work? In a lease-to-own agreement with Snap Finance, Snap purchases the merchandise from the retailer and then leases the merchandise to you, the customer.

As part of your agreement, you make payments over time to Snap. Once you make all your payments and have completed the terms of your lease agreement, you obtain ownership of the merchandise and it's yours.

Lease-to-own financing is a popular option because you can take home your items immediately and payments don’t change. With Snap Finance, you can choose an early ownership option to save on overall lease costs.²

It won’t affect your FICO® to apply for Snap’s lease-to-own financing³ and approval amounts are up to $5,000 in lease-to-own financing.⁴

You can apply for Snap’s lease-to-own financing in minutes, online or in-store, and get a decision in seconds. Shop at thousands of partner retailers, from furniture stores to tire shops to electronics retailers.¹

What is layaway?

Layaway is one of the original ways to buy something over time. You pick out an item, put down a deposit (usually 10-20%), then make payments until it's paid off. The store holds your item until you've paid in full. Only then do you get to take it home.

One of the biggest benefits of layaway is that there's no credit check because you're not borrowing money – you're just paying for something in installments. There are also no interest charges or fees, in most cases.

But layaway has drawbacks. You can't use your item while you're paying for it. If you need a new washer because yours broke, layaway won't help you do laundry today. Instead, you'll have to wait until you've made every payment before you bring your new washer home.

Layaway programs are also becoming rare. Many major retailers have stopped offering them. This makes layaway less convenient than it used to be.

What if you can't complete your payments? You might lose your deposit or need to pay cancellation fees. Each store has different rules, so read the agreement carefully.

What is rent-to-own?

Rent-to-own sounds similar to lease-to-own, but there are major differences. Rent-to-own programs are typically offered through local rent-to-own stores rather than major retailers. That means you can usually only choose merchandise from a rent-to-own store.

With rent-to-own, you can take your item home immediately. You make weekly or monthly payments until the end of your agreement. Then you’ll own the item. Your agreement may be longer than other options and some contracts don't have clear end dates. As with any financing agreement, read your contract carefully before making a decision.

Snap Finance vs. rent-to-own programs

Snap’s lease-to-own financing and rent-to-own differ in several key ways. Rent-to-own stores may have different costs, return policies, and fees. Rent-to-own stores typically focus on electronics, furniture, and appliances. They might have showrooms where you can see items in person. But their selection is usually limited compared to Snap’s network of partner retailers.

Rent-to--own payment schedules may be weekly, which can be harder to manage than monthly payments. Check your agreement carefully to learn what happens if you miss a payment, including when and how you return the item and if you lose what you’ve already paid.

When you compare layaway vs lease options, the main difference is timing. Layaway makes you wait to use your item. Lease-to-own and rent-to-own let you use it right away.

For pay-over-time furniture options, lease-to-own and rent-to-own both let you furnish your home immediately.

When lease-to-own is the best fit

Lease-to-own often works best in several situations. If you need something right now – your  washing machine broke or you’re moving a need a new mattress – it's often you’re a popular choice among no credit financing choices.

Lease-to-own also works well when you want predictable payments to make budgeting easier. And with Snap, you can easily apply online or in-store using your smartphone and get a decision in seconds.

If you have limited or poor credit, Snap Finance may work for you.³ Snap considers more than your credit score. And you can use Snap’s 12-18 month Maximum-Term Plan or choose an early ownership plan to save on overall lease costs.²

When to consider alternatives

While lease-to-own has many advantages, it's not always the best choice. If you can wait to use your item and want to avoid financing costs, layaway might work better. Some stores still offer fee-free layaway during holiday seasons.

If you only need something for a short time, traditional rental might be cheaper. Renting a carpet cleaner for one day costs less than leasing one you'll own at the end of a lease agreement.

For small purchases under $100, it might be worth saving up to buy with cash. The convenience of lease-to-own is most valuable for larger purchases where waiting isn't practical.

Furniture lease vs. layaway: A real-world example

Imagine you need a new couch. Your old one finally gave out, and guests are coming next week. With layaway, you'd put down $50-100, then make payments while sitting on the floor. You can't use the couch until it's fully paid off.

With furniture lease vs layaway comparison, lease-to-own lets you take the couch home today. You make payments over time while you use your couch.

Making your decision

Lease-to-own vs layaway vs rent-to-own each serve different needs. Think about these questions when making your decision:

• Do you need the item right away?
• Where do you want to shop?
• Do you want the option to pay off early?
• Do you prefer monthly payments over weekly ones?

All three payment methods can work, but it’s a matter of figuring out which works best for you.

Ready to use lease-to-own to get what you need today? Use the Snap Finance Store Locator to find retailers near you then apply online or in-store.

Learn more with these resources from Snap Finance:

• Lease-to-own vs. credit cards: Which saves you money?
• Lease-to-own 101: How Snap Finance works from application to ownership
• Four things to know about lease-purchase, rent-to-own, or lease-to-own agreements

The advertised financing may be originated by one of several lenders. All loans or retail installment contracts originated by our lending partners will be serviced by Snap Finance LLC.

¹Some restrictions may apply on leasable auto parts, electronics, or sporting goods. Please check with merchants for details. 

²The default payment plan is the Maximum-Term Plan, which includes 12- to 18-month renewable terms and is your highest cost option. To exercise an early ownership option, including the 100-Day Option, customers must make all regular payments on time and ensure the required amount is paid within the applicable timeframe via the customer portal or by contacting Customer Care at 1-877-557-3769. The 100-Day Option may include a cost of lease above the merchandise price.

³Not all applicants are approved. While no credit history is required, Snap obtains information from consumer reporting agencies in connection with applications, and your score with those agencies may be affected.

⁴Approval amounts vary from $300 to $5,000, subject to underwriting, and apply only to the cash price of leased items.