HVAC Financing

What is HVAC financing?

HVAC financing is quite simply a method of paying for a new HVAC system in installments rather than all at once. Many homeowners don’t have enough spare cash to pay for a full replacement system, so plenty of manufacturers, installers, lenders, and other companies offer ways to finance the purchase.

An HVAC system can vary depending on where you live. If you live somewhere that doesn't need air conditioning, it can often solely consist of a furnace. Others would consist of a furnace and air conditioning unit, or a combination of a few other things. All of the options will make the price vary widely, but either way, it is possible to finance.

Which lenders offer HVAC financing?

LightStream

✔ Funding: Borrow $5,000 - $100,000
✔ Minimum Credit Score: 660
✔ APR: 2.49% - 19.99%
✔ Funding turnaround: as soon as same business day

LightStream offers up to $100K on personal loans as soon as same business day (the most out of most lenders!)

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Avant

✔ Funding: Borrow $2,000 - $35,000
✔ Minimum Credit Score: 550
✔ APR: 9.95% - 35.99% APR
✔ Funding turnaround: Within 24 hours

Avant offers super fast funding and is a great personal loan option for individuals with fair to good credit scores.

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Best Egg

✔ Funding: Borrow $2,000 - $50,000
✔ Minimum Credit Score: 600
✔ APR: 4.99% - 35.99%
✔ Funding turnaround: 1-3 business days

Borrowers with fair to good credit can obtain personal loans at competitive APR rates with Best Egg.

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Discover

✔ Funding: Borrow $2,500 - $35,000
✔ Minimum Credit Score: 660
✔ APR: 5.99% - 24.99%
✔ Funding turnaround: within 24 hours

Borrowers can get funded as fast as next business day with Discover personal loans.

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AXOS Bank

✔ Funding: Borrow $10,000 - $50,000
✔ Minimum Credit Score: 700
✔ APR: 6.79% - 17.99%
✔ Funding turnaround: within 24 hours

Individuals with good to excellent credit can get funds as fast as next business day with AXOS Bank personal loans.

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How does HVAC financing work?

HVAC financing works differently depending on where you decide to get your financing.

Generally, there are three options for financing your HVAC system.

• Through the HVAC manufacturer
• Through the HVAC installation company
• Personal loan through a 3rd party lender

The process for financing varies depending on which method you choose. For example, choosing to open a personal loan will require an application to be filled out, often a credit check to be run, and then you will be presented with terms to accept.

Depending on the lender you may be offered an interest-free period, a grace period where no payments are due, or various other benefits. Going forward you’ll need to make monthly payments to ensure you don’t default on your loan.

Can HVAC systems be financed?

Yes, HVAC systems can be financed.

The most common method of financing an HVAC system is with a personal loan through a financial institution. Many Americans find themselves financing HVAC systems today due to the high overall cost and low-interest rates that are currently being offered.

Options to finance an HVAC system

While there are many options for financing an HVAC system, some may be better than others.

• Personal Loan - offered through lenders such as Discover, Lightstream, and others. These loans can be used for various home expenses and often offer lower interest rates and better terms than other options.
• Home Equity Loan - A home equity loan is borrowing funds against the value of your home. These can be risky as they can result in foreclosure if too much is borrowed and you are unable to pay the loan off.
• Credit Card - If your credit limit is high enough, you can often pay the entire sum on your card. The downside is most cards have high-interest rates (often in the 20% range) which can result in large interest payments.
• Direct through HVAC company - Although not all HVAC manufacturers offer financing, it can be a good option if you buy the system directly from them. Their financing is often run through a 3rd party lender, so you may not get better rates than you would if you applied with the lender directly.

Pros and cons of HVAC financing

Like everything in life, it’s important to know the positives and negatives of a decision. Here are the pros and cons of financing a new HVAC system.

PROS

• Avoid a large upfront cost - spread the payments over a longer period
• Energy Savings - your new unit will run more efficiently, saving you money on your power bill
• Avoid Costly Repairs - HVAC units require more repairs the older they get, and a new unit will be able to run for a long time without breaking

CONS

• Potentially not needed - if you have a newer HVAC unit, it may make more sense to repair than it would to replace
• Interest - taking out a loan or financing results in interest, which will be added to the original cost of the HVAC system

Example of an HVAC loan

Many different lenders offer personal loans. These are loans that can be used for numerous things such as weddings, debt consolidation, and in our case, home remodeling.

Discover is a popular lender that offers personal loans to homeowners which can be used for purchasing a new HVAC system.

At Discover, you can receive a loan of up to $35,000 for a wide variety of expenses, though this number is much higher than most people will need for an HVAC system.

Discover has no origination fees, meaning the only thing you will pay is your monthly payment on your loan. The interest rates are fixed and will vary from 5.99% to 24.99% depending on your financial situation.

Discover offers repayment terms of anywhere from 36 to 84 months, giving borrowers flexibility in their payments, and offering the chance at a much lower monthly payment.

Types of HVAC systems that can be financed

With such a wide variety of HVAC systems out there, it may leave you confused as to which system works for you, and whether it can be financed. Here are some of the most common types of HVAC systems that can be financed.

Heating and cooling split systems

These are the most common HVAC systems offered today. These systems are great for climates in which both heating and cooling are needed annually. The way the systems work is by having two separate units - one for heating, and one for cooling.

The cooling system is located outside and is the typical “box” air conditioning system you often see on the outside of homes and buildings. The heater, which could be a furnace, a boiler, or another system - is located inside the house and provides heating using either electricity or gas.

Hybrid split systems

These systems are nearly the same as the heating and cooling split system with one major difference. Homeowners like these systems because they can often result in a lower power bill than typical split systems.

These systems offer the homeowner the choice of altering between eclectic and gas, which can help them choose whichever power method is cheaper at the time, saving them money.

Duct free systems (Mini-splits)

Often installed in smaller residences, or individual rooms within a residence, a mini-split is a great method for controlling the temperature in individual rooms.

The mini-split is mounted on the interior wall, while the condenser for the system is mounted somewhere outside. While this does require a hole to be drilled in the wall and a system permanently mounted on the wall, it is usually a quick installation and provides great temperature control per room.

Packaged heating and air conditioning systems

Often the least popular, this type of system tends to be used in warmer climates because the heater is usually electric, which does not work great in very cold climates.

These are often placed on the interior of the house and can be done if there isn’t room on the outside of the building for a split unit.