How to finance a new AC unit: A useful guide for you

We agree that replacing or upgrading your heating and cooling system can be a big expense. However, with the right HVAC financing options, it doesn’t have to break the bank. Whether you’re looking for convenient monthly payments or competitive interest rates, there are several ways to make this investment affordable. Let’s explore how to finance a new AC unit while keeping your finances on track.

Financing through an HVAC company

Many HVAC companies offer special financing options to help customers cover the cost of a new heating, ventilation, and air conditioning system. These plans often come with fixed interest rates and terms, allowing for predictable monthly payments that fit your budget. 

Sometimes, banks like Wells Fargo Bank NA partner with HVAC companies to offer special financing programs. These programs make it easier for homeowners to afford major heating and cooling system upgrades. Such offers may include promotional interest rates or deferred payment plans, giving you the flexibility to manage your budget.

Keep in mind, however, that these offers are typically subject to credit approval. A good credit score can help you qualify for the best rates.

Personal loans

Another popular way to finance a new AC unit is through a personal loan. Many banks and credit unions offer personal loans specifically designed for home improvement projects. These loans often feature competitive interest rates and flexible terms. If you have a strong credit score, you’re likely to secure better rates, making this a cost-effective option for upgrading your heating and cooling system.

Credit cards

If you’re dealing with an emergency repair or replacement, a credit card might be the quickest way to finance your new HVAC system. Some credit cards offer introductory 0% APR promotions, which can be a great short-term solution if you plan to pay off the balance quickly. Be cautious, though; once the promotional period ends, interest rates can rise significantly, potentially making this an expensive option in the long run.

Home Equity Line of Credit (HELOC)

A home equity line of credit is a smart choice if you’re tackling a larger home improvement project that includes a new HVAC system. With HELOC, you can borrow against the equity in your home, often at lower interest rates compared to personal loans or credit cards. This option is particularly appealing for homeowners with significant home equity who want to spread out payments over time.

Credit union loans

Credit unions are known for offering competitive interest rates and personalized service. If you’re a member of a credit union, it’s worth checking their HVAC financing options. Remember, credit unions usually have lower fees and more flexible terms compared to traditional banks. They are an attractive choice for financing your new heating and cooling system.

What are some useful tips for choosing the right financing option?

• Compare interest rates and terms: Look at both the short-term and long-term costs of your financing option. Fixed interest rates are generally more predictable than variable rates.
• Check your credit score: A higher credit score opens doors to better financing deals. So, review your score before applying.
• Understand monthly payments: Choose a plan with monthly payments that fit comfortably into your budget to avoid financial strain.
• Read the fine print: Always read the terms and conditions carefully. Especially, when dealing with special financing offers that may have deferred interest clauses.

What are the benefits of financing a new HVAC system?

Given that HVAC systems easily run between $5k and $15k, many families choose to finance their new AC and heating systems. 

Financing your new HVAC systems, maintenance, and repairs offers:

• Convenient monthly payments. It’s easier to spread out the cost over time instead of paying a lump sum upfront.
• Improved home comfort. You can enjoy the benefits of a modern heating and cooling system without delay.
• Energy efficiency savings. Many newer HVAC systems are more energy-efficient, leading to lower utility bills.

Final thoughts on the best way to finance a new AC unit

With options ranging from personal loans and credit cards to special financing through your HVAC company, there’s a solution for every budget. By choosing a financing option with competitive interest rates and terms, you can enjoy a comfortable home without compromising your financial health.

Read more: Things you should know about an HVAC system

Written by Ramona Sinha. December 18, 2020

Ramona is the Senior Content Writer for Kukun. This experienced blogger uses simple and succinct words to decipher the complex phenomenon called life. She has written articles covering a broad range of topics, such as real estate, lending and mortgage, finance, business, taxation, home designs, home improvement projects, decor concepts, and more. An avid traveler, she’s a digital nomad at heart and an animal lover from the depth of her soul.