Select Your Payment Option — Shopping Loans

If layaway payments make you too impatient to own your next big purchase, good news: You can just take out a loan at checkout instead. Retailers are starting to offer plans for consumers to bring home that new couch and pay as you go. There are lots of reasons to cheer this development, and just as many to stop and think it through.

Called shopping loans, checkout loans, and point-of-sale loans, these new payment options are as easily accessible as a store credit card. On checkout, you can choose to provide some pieces of personal information, such as your phone number or the last four digits of your Social Security Number. A lender will then determine your eligibility and offer a variety of payment plans. Some ecommerce websites, as well as major retailers like Walmart, are either already offering POS loans or are considering it for the future for items above a certain price point.

Stay on your guard with the quick-loan process, though. The very things that make it seem like such a great deal may also land you with high interest payments (think 20 percent to 30 percent APR), bumping up the price of the item overall. These lenders may also not determine your eligibility using the same guidelines as other institutions, a sign that they could be predatory. Finally, every time you apply for a loan, it shows up on your credit report, so check whether the lender would also report loan payments that improve your credit score.

Like any convenience, especially financial ones, there's always fine print to consider. But if you're looking to spend big and avoid credit card debt, POS loans might be worth your while.