Best HVAC Loans And Financing Options Of April 2024 – Forbes Advisor

Compare Personal Loan Rates

Best HVAC Loans And Financing Options

BEST OVERALL HVAC LOAN

SoFi®

APR range

8.99% to 29.99%

with autopay

8.99% to 29.99%

with autopay

Editor’s Take

SoFi is an online lending platform that offers unsecured fixed-rate personal loans in every state. Founded in 2011, SoFi has extended over $50 billion in loans and stands out for allowing high loan amounts and its availability of extended loan terms.

Loans are available from $5,000 to $100,000, making SoFi a great option for those with excellent credit who need to borrow a large amount of money. Loan amounts available may vary by the state you live in. Repayment terms range from two to seven years, making SoFi an incredibly flexible option for those with sufficient credit (minimum 650) and annual income (at least $45,000). SoFi also lets prospective borrowers submit joint applications—although co-signers are not permitted.

Approved borrowers are rewarded with comparatively low APRs. What’s more, SoFi doesn’t charge origination fees, late fees or prepayment penalties—a stand-out feature because personal loan lenders often charge origination or late payment fees at a minimum.

However, if you’re considering a debt consolidating loan from SoFi, keep in mind that the lender does not offer direct payment to a borrower’s other creditors. This means the loan proceeds will be deposited to your bank account and you’ll have to pay off your other lenders individually. The platform does offer customers a number of other perks and discounts.

Pros & Cons

• Prequalification with soft credit check
• Funding in as little as one to two days
• High loan amounts and lengthy terms

• Does not offer direct payment to third-party creditors for debt consolidation
• Some applicants report difficult qualification standards
• Co-signers are not permitted

Details

Eligibility:

• Minimum credit score required: 650
• Minimum annual income: $45,000
• Co-signers not permitted

Loan uses:

• Medical expenses
• Credit card consolidation
• Home projects
• Moving costs

BEST FOR LOW INTEREST RATES

LightStream

APR range

7.49% to 25.49%

with autopay

7.49% to 25.49%

with autopay

Editor’s Take

LightStream offers loans with both a low minimum and maximum interest rate, along with a rate-beat program. LightStream’s unsecured personal loans range from $5,000 to $100,000 with loan amounts varying based on the loan purpose. In addition to offering appealing and flexible terms, LightStream charges no origination, late payment or prepayment fees. The lender also offers a 0.50% rate discount for borrowers who enroll in autopay.

Pros & Cons

• No origination, prepayment or late fees
• Low, competitive rates
• Fast approval and funding

• No prequalification process
• No due date flexibility
• Limitations on use of loan proceeds

Details

Eligibility:

• Applicants should have several years of credit history
• Minimum credit score: 660
• Can’t prequalify

Loan uses:

• Large expenses
• Finance land, timeshares and tiny homes
• Home project

BEST FOR FAST FUNDING & BELOW-AVERAGE CREDIT

LendingPoint

APR range

7.99% to 35.99%

with autopay

7.99% to 35.99%

with autopay

Editor’s Take

LendingPoint is an online lender based in Atlanta that offers personal loans to prospective borrowers in 48 states and Washington D.C.; it does not offer loans in Nevada and West Virginia. Prospective borrowers in eligible states can apply online and benefit from quick funding.

LendingPoint personal loans range from $2,000 to $36,500; Georgia loans have a minimum loan amount of $3,500. Repayment terms range from 24 to 72 months—or two to six years.

There are two main disadvantages to LendingPoint: high maximum APRs and origination fees. While you can typically avoid high APRs by maintaining a high credit score, LendingPoint origination fees (up to 10%) depend on the state you live in.

Pros & Cons

• Quick funding
• Low credit score requirements
• No prepayment penalty

• Origination fee up to 10%
• Co-signers or joint loans not permitted
• Not available in Nevada and West Virginia

Details

Eligibility: 

• Minimum credit score: 600
• Must live in a state other than Nevada or West Virginia
• Doesn’t allow co-signers or co-applicants

Loan uses:

• Debt consolidation
• Home project
• Medical expenses

BEST FOR BAD CREDIT

Upgrade

Editor’s Take

Upgrade was launched in 2017 and provides accessible online and mobile credit and banking services. Since that time, the platform has made more than $3 billion in credit available to over 10 million applicants and continues to expand its online and mobile services. Although maximum APRs are on the high end compared to other online lenders, Upgrade makes loans available to those with poor credit history.

Loans amounts, which range from $1,000 to $50,000. Upgrade has two- to seven-year terms  available. Upgrade charges an origination fee between 1.85% and 9.99% of the loan, and borrowers will encounter a $10 fee if their payment is more than 15 days late or if the payment does not go through; there are no discounts for autopay. That said, Upgrade borrowers are not subject to a prepayment penalty, so you can reduce the overall cost of the loan if you’re able to pay it off early.

Beyond offering accessible personal loans, Upgrade streamlines the lending process with a mobile app that lets borrowers view their balance, make payments and update personal information. Upgrade’s Credit Heath tool also makes it easy to track your credit score over the life of your loan.

Pros & Cons

• Low minimum credit score requirement
• Borrowers can use loans to cover business expenses
• Offers direct lender payoff for debt consolidation loans

• High APR range
• Charges fees for origination, late payment and insufficient funds

Details

Eligibility: 

• Minimum credit score: 580
• No minimum income requirement
• Allows co-applicants

Loan uses:

• Debt consolidation
• Home projects
• Large expenses
• Business expenses

BEST FOR COMPARING MULTIPLE OFFERS

Universal Credit

Editor’s Take

Universal Credit is an online lending platform that offers personal loans between $1,000 to $50,000 through its partners. Repayment terms range from three to seven years.

While Universal Credit makes finding a personal loan accessible even to those with damaged credit, it comes with a few tradeoffs. First, it charges high APRs, well above the most competitive rates seen on our list. Second, Universal Credit charges a 5.25% to 9.99% origination fee on all personal loans. Because this is deducted from your loan proceeds, you’ll need to factor this in when determining your loan amount to ensure you receive the necessary amount after the fact.

Pros & Cons

• Flexible qualification requirements
• Next-day funding
• No prepayment penalty

• High APRs
• All personal loans charge a 5.25% to 9.99% origination fee

Details

Eligibility:

• Minimum credit score: 580
• Minimum income requirement: Does not disclose
• Doesn’t allow co-signers or co-borrowers

Loan uses:

• Debt consolidation
• Large expense
• Home project

BEST FOR NO INTEREST IF REPAID WITHIN 30 DAYS

Discover

Editor’s Take

Discover is an online bank that also offers customers credit cards, retirement solutions and personal loans in all 50 states. As a lending platform, Discover stands out because of its online application and mobile banking tools, well-reviewed customer support team and quick funding.

In general, loans are available from $2,500 to $40,000 and may be issued for between three and seven years. So, while borrowers may get a larger loan from another lender, the repayment terms are fairly flexible. Discover charges a late payment fee and does not offer an autopay discount; however, it does not charge any origination fees or prepayment penalties, making it competitive with other top personal loan providers.

Pros & Cons

• Option to pay off creditors directly
• No origination fees or prepayment penalties
• Directly pays creditors

• Charges late fees
• Low maximum loan amount

Details

Eligibility: 

• Minimum credit score: 660
• Minimum household income: $25,000
• Doesn’t allow co-signers or co-borrowers

Loan uses:

• Medical bills
• Business expenses
• Home renovation

Summary: Best HVAC Loans And Financing Options

Methodology

We reviewed 29 popular lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the best lenders based on the weighting assigned to each category:

• Loan cost: 35%
• Loan details: 20%
• Eligibility and accessibility: 20%
• Customer experience: 15%
• Application process: 10%

Within each major category, we also considered several characteristics, including available loan amounts, repayment terms, annual percentage rate (APR) ranges and applicable fees. We also looked at minimum credit score requirements, whether each lender accepts co-signers or joint applications and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like prequalification options and mobile apps.

Where appropriate, we awarded partial points depending on how well a lender met each criterion.

To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Loans Rating & Review Methodology.

Tips for Comparing HVAC Loans

Follow these tips when comparing HVAC loans:

• Choose a loan amount that fits your needs. When financing a new HVAC system, you will be on the hook for the full loan amount plus interest—regardless of how much you spend on the equipment and installation. For that reason, find a lender with minimum loan amounts that meet your needs.
• Shop around for competitive rates and fees. Before committing to an HVAC loan, shop around for the most competitive rates as well as reasonable lender fees. In addition to researching banks, credit unions and online lenders, ask your HVAC contractor if they offer in-house financing.
• Compare repayment terms. While a lower payment amount may sound appealing, it usually means a longer repayment period. This translates into higher interest costs over the full loan term.
• Opt for a feasible funding time. Depending on the circumstances of your HVAC work, it may be necessary to access funds quickly. If this is the case, choose a lender that offers fast approval times and same- or next-day funding.

What Is HVAC Financing?

HVAC financing is a specific type of unsecured personal loan that can be used to replace or purchase an HVAC system. Approved borrowers will receive the full loan amount as a lump sum, which is typically repaid over a period of one to seven years. As with other personal loans, amounts range from $1,000 to $100,000, and APRs usually range from 6% to 36%.

Qualifications for HVAC financing vary by loan type and lender, but applicants should have a stable income, low amount of debt and a high credit score to access the most favorable terms. Choose a loan that covers your HVAC replacement without having too much cash left over—the more you borrow, the more you’ll pay in interest over the life of the loan.

How Much Does It Cost to Install a New HVAC System?

The cost of a new HVAC system varies greatly, depending on the type and size of the system, the quality of the equipment and local installation costs. On average, you can expect to pay anywhere from $5,000 to $10,000 for a full replacement of a new system. This cost generally covers the new unit and labor as well as removal and disposal of the old system.

Depending on your needs, replacing the entire HVAC system may not be necessary. Instead, you might opt to replace individual components. However, if you need to replace multiple parts, it may still be cheaper to replace the entire unit.

Best Ways to Finance HVAC Systems

There are a few ways to finance the purchase and installation of a new HVAC system or replacement of individual components. For example, personal loans are unsecured and offer a great deal of flexibility in both loan amounts and funding speeds. However, some homeowners don’t have a high enough credit score to get approved for a personal loan or other traditional financing methods.

Similarly, 0% APR credit cards also can reduce the overall cost of borrowing but may only be available to the most creditworthy borrowers. Borrowers who are unable to qualify elsewhere—or just prefer a more convenient lending process—may qualify for a loan or payment plan through the HVAC contractor, if available.

HVAC Financing Alternatives

Borrowers with poor credit—or those with no credit at all—may not qualify for traditional HVAC financing. Likewise, a personal loan may not be the best solution for every HVAC project. Consider these alternatives if traditional HVAC financing isn’t a good fit:

HVAC Company Financing

If your efforts to get a traditional personal loan aren’t successful, the HVAC company you’re working with may offer an in-house financing option. Some HVAC contractors also partner with local lenders to offer loans. This is often the most convenient option, as many contractors and lending partners allow homeowners to combine their installation and equipment costs into one payment plan.

0% APR Credit Card

A 0% APR credit card offers borrowers an introductory period—usually between six and 18 months—with a promotional 0% APR. These cards are often reserved for the most creditworthy borrowers, but they can be an excellent HVAC financing option for those who qualify.

Unlike a personal loan or other types of HVAC financing, the homeowner can access their credit line on an as-needed basis, and interest does not accrue until the promotional period ends.

This means you can pay for a new HVAC or repairs when the need arises, then delay payment without increasing the overall cost of the system. Once the 0% term is over, though, interest will accrue at the usual rate (generally between 13% and 28%).

Government-backed Loan

Depending on your needs and circumstances, a government-backed loan may be an option. The Department of Housing and Urban Development works with homeowners to make their homes more livable and useful through Federal Housing Administration (FHA) Title 1 loans.

Alternatively, an FHA 203(k) loan can help you refinance your current mortgage to cover HVAC costs. Government-backed loans can save you money on financing, but each program has its own requirements, and the application process can slow down the installation of a new system.

Emergency Fund

Though not technically a financing option, an emergency savings account can come in handy in situations where homeowners need to repair or replace an HVAC system. It’s best not to spend an emergency fund unless it’s absolutely necessary. However, if any part of your HVAC system breaks down during the summer or winter, this may be considered an emergency—especially if you have kids or seniors living in the home.

Next Up In Personal Loans

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