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Peloton Financing: Get in Shape for Less Money

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Peloton offers two major products: stationary bikes and treadmills. Each allows you to watch live and on-demand fitness classes for monthly Peloton memberships with unlimited access starting at $39. These products are ideal for people who prefer to work out at home, but they do come at a high cost — a Peloton Bike costs start at $1,895, and the “Treads” start at $2,495.

You can finance your Peloton purchase in a variety of ways, including with the point-of-sale lender Affirm.

4 Peloton financing options

1. Affirm point-of-sale financing

Affirm is an online lender that partners with the manufacturer to offer Peloton financing at time of checkout. With Affirm, you can apply for an installment loan that is repaid over 12, 24 or 39 months. Your interest rate is fixed and there are no fees.

Affirm loan rates and terms depend on your credit profile and purchase amount, but include:

  • APR: 0.00% – 30.00%
  • Repayment term: 12 to 39 months (depending on the size of your purchase)
  • Fees: No origination fee, late payment or other additional fees
  • Down payment: May be required at checkout.

Unfortunately, Affirm doesn’t provide detailed information about their credit score requirements. However, you can still find out if you prequalify for financing, as well as the amount you may be eligible to borrow and the APR, straight from Peloton’s website. Doing so will not affect your credit score — keep in mind, however, that prequalification does not guarantee loan approval.

Assuming a 0.00% APR, here’s what your monthly payments may look like with Affirm financing:

Is this a good option for you?

If you have exceptional credit and qualify for a 0.00% or similarly low APR, Affirm could be your most affordable option when you can’t pay in full. Spreading your payments over a few months makes your purchase more manageable, especially since Affirm doesn’t charge any additional fees such as origination or late payment fees.

Pros

  • 0.00% APR for qualifying applicants
  • Flexible repayment terms
  • No origination or late payment fees

Cons

  • Can only borrow to spend at select stores
  • Unclear credit requirements
  • Down payment may be required

This financing option may also be a good fit if you have a low minimum balance on your credit card and the purchase exceeds your limit, or if you’d have to pay back your debt at a higher rate. If you don’t think you can make the monthly payments, however, taking on more debt might not be the right solution.

2. Personal loan

Personal loans are installment loans that are typically repaid over 12 to 60 months. You can find small personal loans with fixed interest rates from banks, credit unions and online lenders.

Unlike with Affirm loans, you’ll receive a lump sum of money after being approved for a personal loan. You can use those funds on a variety of needs, including major purchases. However, minimum borrowing limits typically start at $1,000, but could be as high as $2,000 or $5,000.

  • APRs: Rates usually fall between 6% and 36%
  • Loan repayment terms: Generally, range between one to five years
  • Qualification requirements: Varies by lender, though higher scores are generally preferred. However, if you have a lower score and don’t qualify, there are bad credit loans you may consider instead (just beware high-interest rates).

Many lenders allow you to see offers with a soft credit check. Because terms vary by lender and your credit, it’s important to shop lenders by comparing offers. These offers aren’t a guarantee that you’ll be approved for financing, but they could help you determine which lender may have the best deal for you.

Is this a good option for you?

If you have excellent credit, personal loan lenders will struggle to compete with a potentially 0% APR from Affirm. Even if you land an OK APR through a personal loan, Affirm may still be a better option as it doesn’t charge an origination fee. You’ll find many personal loan lenders change between a 1% and 8% origination fee, though there are no-fee loan options.

Where personal loans come out on top, however, is with their flexibility in repayment terms. Some lenders offer terms as long as 84 months, or even longer. You also have the ability to spend funds as you see fit, so you could take out a larger loan to purchase additional gym equipment. Lastly, bad credit borrowers may not qualify with Affirm, but they could find a personal loan lender to finance their Peloton — just make sure the cost for the loan is worth the purchase.

Pros

  • Possible longer repayment terms
  • Quick approval process
  • Competitive APRs

Cons

  • Hard to qualify for borrowers with bad credit
  • Possibly higher APRs than other financing options
  • May charge fees, including origination fees

3. Credit card with a low intro APR

Using a credit card with an introductory 0% APR to purchase a Peloton Bike or Tread could be a cost-effective way to minimize interest charges. These types of offers typically last as long as 18 months, after which you’ll pay the regular APR on your outstanding balance.

Another key benefit to a credit card is the flexibility on how you can shop. With a loan, you’ll borrow a set amount and must take out a new loan to access additional funds. With a credit card, however, as you pay down your balance, you can make additional charges to your card up to the credit limit.

However, there are notable downsides to this financing option:

  • High APR after the intro period: You should pay off most or all of your balance before the introductory period ends as the regular APR can be above 20%, making repayment far more expensive.
  • Strong credit needed: Credit cards offering this type of deal to new customers usually require good to exceptional credit.
  • The debt’s effect on your credit: Taking on a large amount of credit card debt can adversely affect your credit score by increasing your credit utilization ratio, the amount of your debt in relation to your credit limit — “amounts owed” is a factor that makes up 30% of your FICO Score.

Another thing to consider with this Peloton financing option: You’ll lose the introductory 0% APR if you’re late on payments or have a returned payment. So, if you’re worried about making on-time payments every month, you may want to consider other options.

Is this a good option for you?

If you don’t have a strong credit history, you may not qualify for this type of credit card offer. However, if you do qualify, this is a strong contender for financing your Peloton. That’s because you may qualify for other sign-up bonuses, such as cashback or bonus miles on rewards credit cards if you spend a certain amount within a few months of opening your account. These can reduce the overall cost of your purchase. For example, if you receive bonus cash for signing up for a new card, you can apply that amount to your balance.

However, a card with an introductory APR may be a poor option if you don’t plan to repay your debt in full before the introductory period ends. That’s because the APR on your new card could reach as high as 22.89% (the maximum APR for new credit offers, according to recent LendingTree data), depending on the card.

Pros

  • 0% APR during the introductory period
  • May earn introductory bonuses or points
  • Introductory period can last as long as 18 months or longer

Cons

  • Must have good to exceptional credit
  • High regular APR after the introductory period ends
  • May have a small credit limit and hurt your credit utilization ratio

4. Paying cash

Financing or using a credit card to pay for a large purchase can end up being significantly more expensive than using cash. So, if you have cash on hand, or think you could save for a big-ticket item, paying cash may eliminate a future financial burden.

If you don’t have cash on hand, try setting a savings timeline to determine how much you can set aside each paycheck for your purchase. For example, since you know the Peloton Bike’s cost, divide the total amount by how much you could save each week, month or quarter to create a savings schedule.

You could even establish a savings account specifically meant for your savings goal, such as a high-yield savings account, so you can accumulate interest while you’re saving for your significant purchase.

Is this a good option for you?

Whether you have a poor credit score or don’t want the hassle of financing a big purchase, paying cash may be the right solution for you. Unlike personal loans, credit cards or financing through Affirm, you can make the full payment upfront without the hassle of credit check or remembering to make monthly payments.

However, if you don’t have enough saved but are ready to buy a Peloton Bike or Tread, you could consider combining a cash payment with a financing option. Combining the two may help you lower your payments and make repayment more comfortable to handle.

Pros

  • No added costs and can avoid new debt
  • No need to qualify for a loan or credit
  • Can combine with another financing option to reduce what you borrow

Cons

  • Won’t help you build credit
  • Can take months before you can afford the purchase

Peloton deals to make your purchase more affordable

The cost for a Peloton Bike or Tread is high, so you may want to try to find other ways to save on the purchase. Peloton doesn’t generally offer sales or discounts; however, there are a few ways to save money, including:

  • Buying a Peloton Bike or Tread with a referral code. With a referral code, you could save up to $100 on your purchase.
  • Waiting for a promotion, such as for free shoes or shipping or accessory packages when you make your purchase. These promotions tend to happen around the holidays, so be on the lookout.
  • Nabbing a special offer for members of the military or first responders by contacting Peloton by phone. Peloton will need to verify your identity before you can receive such an offer.
  • Pick up the 90-day free trial on Peloton’s monthly membership. This lets you access Peloton class, whether or not you own a Peloton Bike or Tread — and it could save you a fair amount of cash if you had already planned on signing up.

Buy a used Peloton Bike to cut costs

Purchasing a used Peloton Bike could lead to significant savings and allows you to avoid paying interest or loan origination fees, assuming you don’t use a credit card or loan to fund the purchase. On eBay, the price for a gently used Peloton Bike can range around $1,300 to $2,500. You may also find used Peloton Bikes for sale on the internet through Craigslist, Facebook Marketplace or other local or national online sales sites.

Keep in mind, you’ll also need to transport the equipment to your home or negotiate with the seller to deliver the item. Any warranty is non-transferable, so you’ll be on the hook for any repairs. Also, if you still need help financing your Peloton purchase, you may not be able to use Affirm or a credit card depending on where you purchased your Bike or Tread.

 

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