HVAC Financing Options for Your Home

More often than not, a new air conditioning (AC) unit is more than just a modern convenience; it’s a necessity. And, you realize the importance of your HVAC system when your old AC unit breaks down in the middle of a scorching summer. Replacing it with a new one can be an expensive affair. So, unless you’re planning to dip into your savings, you may want to consider HVAC financing. 

If you want to know about the cost of a new AC unit or if you’re contemplating air conditioning financing, this guide will help you.

Investing in a good HVAC system can be one of the most important things a homeowner can do for the comfort of their home and for the maintenance of nearly everything in the house.  

Unfortunately, HVAC is also one of the more expensive home systems to maintain with basic units starting around $5k and larger capacity and/or more efficient systems easily running to $15k.

But, fortunately, HVAC financing — even HVAC financing with no credit check — is readily available.

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How do people afford 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. There is a range of options for paying for your new HVAC systems, maintenance, and repairs. 

These include tapping into your savings, unsecured personal loans, credit cards, home equity loans, or home equity line of credit. 

Furthermore, some HVAC contractors are also able to provide their customers with a range of financing options. This is because they sometimes work with HVAC financing companies, have relationships with local banks, or work with on-line loan providers such as Kukun.

Looking for a home renovation loan for your HVAC replacement project? Peruse through Kukun’s easy loan options. 

Can you finance an AC system?

In short, yes, AC unit financing is readily available. There are a number of HVAC financing companies, including Kukun, which can provide financing not just for HVAC but for a wide variety of home maintenance or home improvement needs. And, the loan application process is easy too!

Read more: Home Remodel Financing Options: Best Way To Finance a Home Remodel

Should I finance my HVAC?

The decision to finance an HVAC system is a personal one for each individual family and primarily rests on whether or not they are able to pay for a $5-$15k expense out of pocket.

Financing your heating or cooling system will make your home improvement project easier to deal with. With set monthly installments, you can plan the renovation in a manageable way. The loan repayments can be spread out over 3, 5, 7, or even 10 years. 

The comfort and safety that AC and heating systems provide (as also other home systems such as plumbing, drainage, etc) is something that cannot be readily ignored. Keep in mind that your HVAC system will also help keep your plumbing system from freezing in winters. So, yes, financing the important home improvement is a smart move. 

Air conditioning (AC) unit financing

AC unit financing, or heating unit financing, can be explored in a matter of minutes with Kukun’s financing solution. The tool lets you find out the best loan options that are available. By answering just a couple of questions, a homeowner can obtain loan/financing options at no cost, with no obligation, and with no impact on their credit score.

If you’re specifically looking for a no credit check HVAC financing, the best choice is to opt for an unsecured personal loan or an HVAC loan. You will need to be prepared for a higher interest rate and fees though.

What is an HVAC loan?

An HVAC loan — also sometimes referred to as an AC loan or heating loan — is a loan taken primarily to pay for replacing an HVAC system and typically features a fixed monthly payment option spread out over 3, 5, 7, or 10 years at a fixed interest rate.

This type of special financing can be a personal loan (not “secured” by the property), a home equity loan, or a HELOC (typically results in a lien on the property). Kukun lets you explore all of these from the comfort of your own home in minutes — with absolutely no impact on your credit score! 

How much does it usually cost to repair an AC unit in the United States?

Repairing an AC unit or a heating unit can run several hundred dollars. A typical HVAC repair costs between $150 and $450 on average — with most homeowners spending $320 on AC repair and $270 on furnace repair. Apart from this, most HVAC contractors charge an hourly fee of $75 to $150. 

The repair versus replace decision for a homeowner would generally include the age of the cooling or heating system, the type, and cost of repair, the anticipated effectiveness, durability of the repair, and the availability of financing.

Generally speaking, for older systems, replacement is a better idea. One might expect the frequency of repairs to continue to increase. Plus, newer HVAC units would offer a significant efficiency upgrade. Higher energy efficiency would ensure higher energy savings along with making your home much more comfortable.

Want to create a budget for replacing your home’s HVAC system? Kukun AC installation cost estimator is free, reliable, and quick!

Do air conditioning companies offer financing?

A lot of HVAC manufacturers and installation companies do offer their customers financing options. In most cases, these options are in-house loans that they offer in partnership with a lender. 

While your credit score and income will decide whether you’re eligible for these loans or not, a lot of companies offer limited-time 0% APR financing on air conditioners for up to 60 months.

Another advantage of choosing to use a loan from the manufacturer or installer is that you have the ease of one-stop-shopping. 

However, you could end up paying really high interest rates if you fail to keep up with the repayment schedule.

It is also advisable to ask about extra fees while opting for manufacturer or contractor financing for your new air conditioner.

How long does a residential AC unit last?

While the actual lifespan of an air conditioner depends on a variety of factors, it would be safe to say the average residential AC unit lasts between 10-15 years. Regular maintenance checkups and repairs can make most systems last longer. 

There are a variety of factors that affect an AC system’s longevity. Some of these factors are:

1. The size of the system makes a huge difference to wear and tear. If the system is too small for the room, it will have to work harder to keep the room cool. If the system is too big, it will turn on and off too many times. These shorter cycles also cause a fear amount of wear and tear.
2. If the ductwork is poorly designed, sized, or improperly sealed, the performance and the lifespan of our AC unit can be negatively affected.
3. If your outdoor unit is exposed to extreme weather conditions, it will affect the lifespan of your air conditioner.
4. The use of improper coil cleaning agents also has detrimental effects on your AC unit.
5. The thermostat should never be set too high or too low for optimal performance.
6. Lack of regular checkups and timely repairs will also affect the lifespan of your AC unit.

Can you get AC financing?

Yes, it is possible to get AC financing with less than perfect credit. Let’s take a look at a couple of options.

Home improvement loans

Home improvement personal loans are a great option to buy your new air conditioner even if you have sub-par credit. The payback period on these loans is between 5 to 7 years, which means you should be able to manage payments easily.

Fixed monthly payments will make planning expenditure and sticking to the repayment plan much easier. 

Another benefit is that these loans are easy to process, and you ought to be able to buy your new AC in a couple of days. Most personal loans also have no prepayment penalties and no hidden charges.

However, your credit score will need to be at least 500 for you to be eligible for one of these loans.

Credit cards

The average 1.5 ton AC unit with 18,000 BTU will put you down around $1,000. You could use a credit card to make that purchase.

However, while credit cars may be easy to apply for and easy to pay with, interest rates can get very high, especially if you have less than perfect credit. In fact, you could end up with an interest rate of up to 20% or more. So unless you are sure you can afford the monthly payments on your card, this might not be the AC financing option for you.

Pros and cons of HVAC financing

HVAC financing comes with a variety of repayment durations/payments and terms. You can choose the best financing program based on the most favorable repayment plan, lowest rates, APR as well as terms and conditions.

Although paying cash upfront — instead of a loan — for a system repair or upgrade would not burden your home finances with any additional monthly payment but it might also result in less flexibility to use your saved funds for other purposes.

Considering HVAC financing can help you plan your home improvement better and on time.

Financing does come with its risk. You cannot afford to miss a repayment deadline. Keep in mind that if you default on your loan repayments, it can adversely affect your credit score and credit rating. And, may even cost you your home if it’s a home equity loan. 

However, if you manage your finances and loans well, you can breathe easy. The right HVAC loan will take care of your home comfort system, and your pocket. 

Read more: Things you should know about an HVAC system

Written by Ramona Sinha. December 18, 2020

Ramona is a content writer for Kukun. This experienced blogger uses simple and succinct words to decipher the complex phenomenon called life. An avid traveler, she’s a digital nomad at heart and an animal lover from the depths of her soul.