I have a slim Seagate 1TB USB 3.0 drive. Super quiet. Normally I buy stuff like that online because I can find it cheap. But I had a big data loss issue earlier this year and needed and external "now" to do recovery. Ran up the street and bought it at Best Buy for about $70ish.
I think it was worth it to buy an actual time machine. You could probably get a cheap used a/b/g/n model off eBay. My family has the new 3TB tower kind, and it seems to put out good wifi, I get good speeds in my bedroom on the top floor, even though we keep it in the basement.