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.
