Go to main content APCI Federal Credit UnionCelebrating 70 Years APCI eBanking

Using Layaway Plans



A layaway plan lets you put an item on hold while you pay for it over time.


What Is Layaway and How Does It Work?

Layaway plans are designed for shoppers who want to make purchases but may not have all of the cash on hand. Layaway is essentially an installment payment plan, where you pay for merchandise over a period of weeks or months. Instead of paying for an item after you receive it – as is often the case with credit cards and buy now, pay later plans – you make layaway payments before you receive your purchase.


Most people who want to buy something but lack the funds will wait until they have more cash and then make the purchase. So why use a layaway plan?


In some instances, you might be worried that the item won't be around by the time you have enough money. If money is tight, you might be worried you won't have the discipline to save specifically for those purchases. That's where a layaway program can come in handy. If you pay a store $50 toward a $300 gift, you'll likely make sure that you continue to make periodic payments and end up buying the item.

With a layaway plan, you generally don't pay interest as long as you make payments on time. If you don't, you will end up spending additional money in interest.


Here’s what to know if you choose a layaway plan to pay for an item:

  • You put down a deposit — plus any fees the store charges (which may include storage costs).
  • You have a short period of time, often 30 days, to pay the rest of the cost.
  • After you pay in full, you get the item.


The Pros and Cons of Layaway Programs

The main advantages of a layaway program:

  • You don't have to pay for the purchase all at once, and you're able to spread out payments.
  • No credit check required.
  • No interest is charged.

The disadvantages of a layaway program:

  • You pay on the layaway plan's schedule, not yours.
  • There are often some fees involved, such as service, restocking and cancellation fees.
  • You may get a refund if you cancel or don't make all the payments, but program fees, if there are any, are usually nonrefundable.


Of course, there are other pros and cons. For instance, a major upside of using a layaway program is not having to worry about going into deep debt. Even better, if you have trouble making the payments, your credit won't be affected. Layaway can be a smart idea for consumers without strong credit. It gives the consumer an opportunity to purchase an expensive product with payments on a weekly, biweekly or monthly time period.


View all of our 2023 - A Year of Financial Wellbeing Blog Posts.

« Return to "APCI FYI Blog" Go to main navigation