Your home or commercial HVAC system is a crucial part of comfortable living. That comfort, though, comes at a price. New HVAC installs or repairs of current systems can be expensive.
However, all is not lost. If you need HVAC service, repairs, or installations, you can finance the costs. This article will cover various HVAC financing situations, expectations, and qualifications. We will also review several HVAC companies that provide financing for you.
If you plan to install an HVAC system, there are a lot of factors that determine the overall cost. Until you get a few quotes from local contractors, you can only guess to the averages you should expect to pay.
The region, location, permits, size of the system, amount of ductwork, attic fans, type of heating, installation, and many more factors affect the final cost. HomeAdvisor estimates that a new system installed will cost between $5,000 and $10,000. Low-end estimates hover around $3,000 while large, intricate systems can cost more than $20,000.
Even repairs can be costly, since parts may need to be ordered, general labor or emergency labor hours billed and even trip fees and taxes can all play a role. Repairs can average a cost of over $400 per trip, as well.
As you can see, there is a need for HVAC financing, and you probably qualify for more than you realize.
What is HVAC Financing?
HVAC financing is just as it sounds. Like an auto or home loan, your creditworthiness is evaluated, among other factors, to determine if you are approved for a lender to provide you with the funding to have your HVAC system installed or repaired.
The benefits of this are seemingly obvious. You will have a new (or repaired) air conditioner or heater to maintain quality and comfort in your home or business. The monthly energy savings will increase with a more efficient system (and you may qualify for energy reduction savings or rebates, too). Not only that, but in most cases, a new HVAC system can increase the value of your home, should you decide to sell.
HVAC Financing Options
When it comes to securing financing for HVAC installs and replacements, you have a few options. Some methods are better than others for installs, while repairs have their own place. See below for more details.
Bank financing isn’t just for mortgages and car loans. You can be approved by your bank or credit union for HVAC installs and repairs as well. Because the cost of a new install is so high, most bank loans will be for installations instead of repairs.
Credit card companies can lend as well, extending a line of credit to cover the cost, though these are more difficult to get than a traditional institution loan from a bank. Normally good to excellent credit ratings are needed, and there may be a desire for some sort of collateral.
A bank also backs private lenders, so while the letterhead may be more personal, the bank will still be on the paperwork. Make sure you know all the details about the financing and repayment schedules before you sign.
Home Equity/Home Insurance Coverage
Some insurances and home equity programs will cover the costs as well. Generally, these are better suited for repairs than installs. With the lower cost of most repairs, the home insurance policies will typically pay for most covered aspects.
In the event your coverage doesn’t include the full repair, you may be able to borrow the remainder against the equity in your home.
The Power Saver Retrofit Program was introduced in 2011 as a way to help homeowners get updated repairs done to their homes to lower emissions and save energy. This program allowed homeowners to borrow up to $25,000 that goes towards repairs and installations of things in the home that reduce energy costs or raise energy efficiency.
This includes installing new HVAC systems but also covers ductwork, insulation, doors and windows, and even solar-powered systems.
Some HVAC companies will also finance the purchase and installation of their systems. These companies are covered in more detail below. However, the effect is that the company handles the sale and installation for a monthly fee while maintaining the rights to the system, or in some cases, as a lien on your mortgage.
Which HVAC Companies Offer Financing?
The following is not an exhaustive list, as that would require an entire website on its own. However, the most common HVAC companies that offer financing and their details are listed here.
Goodman HVAC financing helps people get a newer, more energy efficient HVAC system installed by a professional. Of course all components will be Goodman, but that isn’t a bad thing. Their current financing is open to anyone in the USA, and you can even be approved for no down payment.
Qualifying depends on residency, homeownership, and monthly income, among other small factors. The application and approval process is done by a 3rd party, which is typical. In this case, it is through GreenSky Trade Credit, LLC.
If you enjoy the durability of a Lennox HVAC system, then having your new Lennox system financed through the company only makes sense. They even make the approval process and application easy, often returning a verdict in less than a minute.
You will need to have your personal information ready. Still, with over 28 different loan options and approval odds high for most credit scores, your odds are relatively good at being approved today.
Trane has a long-standing reputation for quality systems. They also make financing available for most homeowners with good or better credit scores. Currently, they offer special financing for a 5-year term with 0% interest on certain new HVAC systems.
Most of the loans go through Wells Fargo, another trusted name in the financial world. The application is simple, and you can be on your way to a new Trane system in just a couple of days.
Carrier is known across the country as a leader in home HVAC. What you may not know is they are one of the few that also specialize in HVAC system financing. You can scroll through the available systems to find the perfect fit, and then apply for financing.
If you are not approved, it doesn’t end there, though. Carrier also has competitive rates and more lenient approval processes in place for those with less than stellar credit. You can even apply for a lease-to-own system for little money down and terms of 2, 4, or 5 years.
Bryant HVAC systems are a powerful underdog in the HVAC world. To help get more homeowners using their systems, they have partnered with Wells Fargo to approve many for HVAC system financing.
Once approved, you will enjoy low monthly payments, cash rebates, and easy online payments through the Wells Fargo portal. Fast approval with good credit scores means you can have your new system in less than a week.
When it comes to reliability, Rheem tops many lists. They also offer the Rheem Residential KwickComfort Financing program. It is a little tougher to qualify for this program than some of the others, though, so if you have bad credit, you may want to skip them.
This doesn’t mean you won’t get approved, but a hard inquiry will lower your credit score by 5 points. If you do qualify, though, the Rheem system you select is installed by a certified professional, and they handle everything from installation to maintenance. A great deal for those who qualify.
Lesser-known York has its own way of doing things, and it works well for everyone. Their in-house financing makes for quick approvals and low monthly payments. You will need to apply online, and if approved, you can make payments online or through the mobile app.
Approval odds are lower than some, but the average is good if your credit score and payment history are above the 660 mark. You can still get approval for those with a lower credit score, but you may have to take additional steps such as a down payment or a secured line of credit.
When it comes to high-efficiency, it is hard to beat Amana. What about their financing, though? They have an attractive offer for those who qualify. How about a brand new system, professionally installed with no money down, low monthly payments, and a maintenance schedule automatically set up for you?
If your credit rating is good or better (credit score above 650), you almost instantly qualify. You must live in the home and be the homeowner (no rentals or leases allowed). The application takes about 20 minutes to complete and submit, but you will have an answer by the following business day (most of the time a lot sooner).
Ruud HVAC is known in the commercial and residential market, and for good reason. Their financial system is also just as reliable. Based on your credit history, you can apply online in about 10 minutes and have an answer in less than 60 seconds.
Once approved, you will find that the monthly rates are low, and the interest is lower than most credit cards. While not everyone is approved, those that do qualify can also apply for a line of credit for any future repairs, installs, or maintenance needs on their new system. This is one of the most complete financing opportunities out there.
Affordable, reliable, and durable, that is the American Standard way. Part of their mission is to see everyone with an American Standard system in their homes. To accomplish this, their financing is a lot easier to get into than most, but it isn’t guaranteed. You still need to qualify, though most applicants with a great payment history and a fair or better credit score are approved.
You also have easy to follow and understand payment terms and options, and there is always more than one way to make your payments. Online, in person, or through the mobile app will keep you up to date on your payment plan.
Daikin started in Japan but is now all over the globe. One of the largest HVAC systems in the world, Daikin also finances its own systems for installation in homes that may not be able to afford a full cost upfront.
The approval process takes a little longer than some of the others, but it is also more complete. Once approved, you have some of the lowest monthly payments (and even some options with no interest). You can also begin the installation almost immediately, with a reputable and dependable technician, throughout the entire process.
When you think Coleman, you probably think about outdoor camping comfort. What you may not think about is your comfort in your own home. Coleman isn’t as well known in the HVAC world as the other names on this list, but they should be. They also do their own financing, which helps thousands of Americans get the HVAC system they need to stay comfortable when not out camping.
The approval process is a little more strict than some of the others and will require more information for the application. You should also be at or above a 700 credit score when applying, though this isn’t the cut off line. Your approval odds increase if you can provide a 3 to 5x income stream, though this isn’t required.
What is Needed for HVAC Financing Approval
Depending on where you go for the financing or loan approval, you will need various things with you. Most of these items will verify who you are, where the home is located, and the value of everything involved.
Other items will determine how worthy you are of the credit extension, which will also determine if you get the approval, or if there are circumstances where your return payments need to be higher, more frequent, etc.
Since all institutions are a little different, you need to make sure you know what is required before you head to the office or make the call. Below is a list of the most common items you will need on hand, or in the virtual space, to start the approval process.
Many places will want a state-issued ID, birth certificate, passport, and social security card.
- Proof of ownership
In most cases, you need to be the homeowner, and also live in the home yourself (not a rental property). This means bringing the deed to the house with you.
- Proof of income
No one wants to give money away without the chance to get it back. Proof you have a steady income, such as tax returns or pay stubs will prove you have a job and can afford the monthly payments.
- Credit Score
Your credit score will be looked at. Most institutions are wary of anything below 650 as a credit score. However, FHA and other banking loans may go as low as 580 for various reasons.
Don’t forget to fill out the application in its entirety. Failure to fill out every box, blank, or question is a reason for immediate disapproval.
Most places will want names, phone numbers, and addresses of personal and professional references. This is also how they will attempt to track you down should you default on your loan payments.
HVAC Financing Options For Bad Credit
If you have bad credit, are rebuilding credit, or have no credit yet, there are still financing opportunities for you.
A secured loan is a type of loan that offers collateral in exchange for the full payment of coverage of the amount being financed. Usually, the collateral will need to be at least 80% of the total value, though different lenders have different rules.
A car title, lien on a home, or even a second mortgage can all be collateral. If the collateral plus any down payments or other determining factors are enough to outweigh the risk of lending, then you can be approved.
If you need a repair done and don’t have the money to cover the costs upfront right now, a payday loan may be warranted. Here, you get a certain amount of money (usually up to $500) that gets paid back the next time you get paid.
Some payday loan lenders will increase the interest rate (about 40% or higher) and allow you to pay off the loan over the next few months.
While these aren’t ideal, as they can be challenging to get out of, it is a solution in emergency cases such as your AC breaking down in the middle of a hot summer.
No Credit Check Required
Other high-risk lenders know people need assistance. They make their money by charging higher interest rates and often by asking for collateral, so they aren’t taking a total loss. However, the trade-off is that they don’t worry about your credit rating or score. Instead, companies like Denco Services lend you the money at a much higher return rate.
If you have bad credit, these may be your only sustainable option for assistance. As long as you make good on your payments, the loans can be paid off quickly.
Frequently Asked Questions
Why is HVAC so expensive?
HVAC has a high cost for many reasons. The first is supply and demand. The more demand for the service, the higher the cost will be. However, HVAC is also a specialized skill trade that requires a lot of knowledge and time to learn and master. The numerous parts that make up an HVAC system all have their own cost, and putting everything together adds up.
Is a loan worth it for a new AC unit?
A loan for a new AC can be worth it if it is done correctly. The immediate return is valuable enough; you have a working air conditioner. If you are working on rebuilding your credit, though, a good loan can help establish a good line of credit in the future, as well.
If I get rejected when applying for a loan, what should I do?
When you get rejected, many reasons could go into that decision. It doesn’t have to be the end of the line. Perhaps you weren’t a reasonable risk for that particular institution, or they have their own internal reasons. If your finances and credit score are strong, you can immediately reapply at a different lender. If your credit is shaky, you may also consider a higher interest rate or collateral loans instead.
What are some more reliable resources when thinking about getting finance?
When thinking of getting financing, the best options are to go through lenders that will likely approve you based on your current standings. You also want to think about lenders whom you have a long-standing relationship with, such as your bank or credit union. The better acquainted the lender is with your situation and finances, the better opportunity you have of getting approved.
When it comes to HVAC financing, you have options. If you have excellent credit and a good relationship with your bank, the best option is to apply through them. However, in emergency situations or if your credit is less than stellar, you can apply through HVAC companies directly and even look for no-credit-check financing. The options are out there.