Every device around the house has its lifespan, and our air conditioning units are no exception. They might suddenly or slowly cease to work, and you’re left with the task of getting a new one. And when you look into your options, there are quite a few things you’ll want to consider.
In this article, we’ll discuss your options for new AC unit financing, talk about AC unit costs, helping you to make an informed decision before getting a new unit.
As a matter of fact, you can also check out Chills AC financing options to make your search even shorter.
So, let’s get into it.
The Basics of HVAC Financing
Financing options for HVAC units usually come into play when the HVAC or AC unit cost and installation are more expensive than the individual or business can afford upfront.
In this scenario, AC financing will involve having to take out a specific loan that will be able to cover the installation and unit costs. In the case of an HVAC system, this will cover the ventilation, air conditioning, and heating system, and those who took out the loan will pay in monthly downpayments.
In these cases, the HVAC financing won’t require any upfront cash outlay from the buyer, and they will still be able to immediately access the energy-efficient cooling and heating system without breaking the bank.
As said above, the buyer makes monthly payments, and depending on the terms they’ve agreed to with the loan provider, the entire sum might take two to six years to pay off entirely.
AC Financing Benefits
New AC unit financing can be a massive help as buying a new system can be pretty harsh on cash flow, especially when the old unit stopped working abruptly and you didn’t have the time to set up a budget for a replacement. AC financing can help buyers bridge the gap between the cost of a new system and the funds available for them now. It makes things a lot easier since buyers don’t have to come up with the necessary funds on the spot and can still get proper cooling and heating in their homes.
Apart from that, an HVAC financing loan is a great way to stay more flexible with your finances in general. It enables you to set up other budgets for different projects as well while making your installment payments each month. Simply put, it’s much easier to tackle your financial obligation this way as your costs are spread out through several months.
Luckily, there are several different options when it comes to AC financing. There are several available methods and arrangements, meaning that every buyer will be able to find something that fits their preferences.
Available AC/HVAC Financing Options
There’s more than one way to finance your AC unit, meaning there’s an option for every budget. And all HVAC technicians and experts agree: there’s an option out there that will suit every need and budget.
That being said, here’s a breakdown of the most common methods for new AC unit financing:
Taking Out a Personal Loan
This is undoubtedly one of the most popular ways to finance an AC unit. Getting approval for such loans usually happens quickly (one or two business days), which allows the buyer to get the required money quickly. There are plenty of options regarding personal loans, so you are free to look for different lenders and filter out those that offer the best rates.
On that end, your rates will be more or less dependent on the type of loan (home improvement or personal) you’ll get approved for.
When researching your lenders, make sure that you meet their eligibility requirements before applying. Generally, the higher your credit score, the better loan terms you will get, so it’s wise to check your credit report before jumping in.
Take Advantage of an HVAC Business
A handful of AC and HVAC manufacturers offer financing options for their customers. More often than not, these are installment loans that are similar to standard personal loans, with the main difference being that itás specific only to the HVAC system you buy.
All in all, this is a rather convenient option regarding HVAC financing because you only have to deal with one company. Furthermore, this also allows you to borrow the exact sum you need to get a new system.
Before choosing this option, just ensure that you have previously looked at the different interest rates that HVAC manufacturers provide and checked out other financing rates as well to avoid overpaying.
Credit Cards
Some services provide HVAC financing via credit cards. Furthermore, if your unit requires some minor maintenance or repairs, like changing the refrigerant, the card will be able to cover the associated costs.
Even though credit cards, in most cases, will come with noticeably higher interest rates than equity or loans, meaning you will probably end up paying more in the end, they can be a great option if you just got a new card that comes with 0% introductory APR. If this is the case, ensure that your balance is settled before the intro APR is over to avoid the high interest.
On the downside, HVAC financing through your credit card may have a negative impact on your overall credit score as it can increase credit utilization.
Home Equity Loans
If you want to take this route, chances are, you can get home equity loans from your bank. Such a loan works like a second mortgage. You basically use the equity built up in the home as your loan collateral. You can also get these loans from different specified home equity loan lenders online and credit unions apart from local banks.
These usually have the lowest interest rates out of all the financing options we’ve mentioned so far; they also come with the risk of losing your very own house if you fail to make your payments. Also, getting approved for these loans may also take much longer, meaning that you might end up without an HVAC system for much longer than previously anticipated.
Consider Loan Programmes
For instance, the FHA PwerSave program enables you to get as much as $7500 without having to use your own house as collateral. Even then, you should know that you’re only eligible if you have home equity.
On the other hand, a LIHEAP or Low Income Energy Assistance Program might be a good idea if you live in a low-income household and looking for grants that help with energy costs.
Choose The Option That Best Suits Your Needs
When it comes to financing a new AC unit, you can choose from several options. However, it’s imperative that you opt for an arrangement that will help you keep your finances in check.
The last thing you want is to ruin your credit score or fail to make payments. As such, if you need additional help with financing options, feel free to reach out to us. Our experts are more than happy to help you find an arrangement that works for you.
