Couple handing credit card to salesman | Thomas Barwick/Getty Images

Dear Personal Loan Adviser,
I just got my first job. I have been living at home to save money. I finally have saved enough for the first month’s rent and the security deposit on an apartment, with a little cash left over.

My parents have given me some furniture, but I need a few more things. I don’t have a credit card. What about all these options the furniture stores offer? Are they OK to use?
— Moving-up Mike

Dear Mike,
Congratulations! Saving is always a good first step in financial responsibility. Keep that mindset with you as you move out on your own. It looks like you need to make a fairly big purchase, and based on your question, I assume that you have a very light credit history or no credit history at all.

Many furniture stores have financing available to people with little or no credit, as long as you have a job and have been there for a period of time.

These lenders will report your payment history to the credit reporting agencies. You need to be confident that you can make the payments on time, because a negative payment history stays on your credit report for 7 years.

Furniture stores offer their own financing

Furniture companies offer special financing to give you the flexibility to buy more and let you choose how you want to pay. That means you can:

  • Pay in full.
  • Spread payments out over time.
  • Combinations of both of those methods.

For instance, you can buy $1,000-worth of furniture with special financing, with no interest for the first 4 months.

Paying it off in 4 payments of $250 would be a great way to start establishing credit. If you can’t pay it off within the special financing time period, your balance becomes like a credit card balance, and you may be subject to higher rates than a standard credit card.

If it’s your goal to not pay interest on your furniture purchase, it’s mission critical that you understand what you need to do to meet the furniture store’s terms and to avoid the interest payments.

A personal loan is also an option

If you don’t think you can actually meet those terms, you might want to consider a personal loan from a bank or peer-to-peer (P2P) lender as an alternative.

You’ll pay interest, but it can be less than the furniture store’s interest rate if you don’t meet the store’s zero-interest rate terms.

Most personal loans don’t have a prepayment penalty, so you can pay down the loan aggressively. Regardless, good luck with your new place.

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