HVAC Financing: Everything you need to know
Whether it’s a furnace, a heat pump, an AC, or new ductwork, you can expect to spend a sizeable amount of money on the purchase.
On average, a new HVAC system in Oregon could cost between $8,000 and $25,000. This cost could go higher depending on the complexity of the system and whether it requires additional machinery, like solar panels or geothermal pumps. You can refer to our other articles, which gave price ranges and explained how those ranges are determined.
That said, you shouldn’t need to empty your savings or go without eating to get heating and cooling for your home. You can finance your new HVAC equipment based on your credit score and qualifications.
In this post, we’ll go over financing options and who provides them, reasons you would or would not finance your system, and why HVAC contractors offer financing. With this post, we hope to break down HVAC financing so that the experience of purchasing your next HVAC system is quick, easy, and not intimidating.
This Article is not Financial Advice: Before we get into the meat and potatoes of this article, we need to say one very important disclaimer. This article is not financial advice and is not a recommendation to take out a loan or pursue a loan product.
This article provides answers to questions that we receive about the financing process for new HVAC systems.
Can you finance a new HVAC system?
Absolutely. You can finance a new HVAC system through various personal loans, or choose an HVAC contractor or manufacturer who partnered with a bank or lending institution to provide you with a flexible payment plan.
What Does HVAC Financing Look Like?
How you get HVAC financing will look different based on the contractor you’re working with, and the manufacturer you’re buying from. Neither of them is a bank or lending institution, so they have to find a partner that can extend credit.
Sometimes the manufacturer has their own lending partner, so all their contractors will have customers apply through the manufacturer’s lending partner. In other instances, the contractors will have their own lending partners, so each contractor that sells one manufacturer’s equipment will have a different financing process.
Manufacturer Financing: If the contractors use their manufacturer’s financing process, they will refer you to the website to complete an online application. Sometimes they might work through the process with you.
Average Term: Each lender will offer their own range of terms. What they can offer you will also depend on your credit score and qualifying. On average, most lenders over terms ranging from 12 to 180 months.
Average Rate: Like the term, each lender can set their own range of rates. You will then need to qualify in order to get more favorable rates. In 2022, the average rates we’ve seen are between 9.99% and 35.99%.
Some companies can offer lower rates, such as 6.99%. Of course, any rate is subject to change at the lender’s discretion. Sometimes lenders or contractors will offer you zero-interest financing if you qualify.
No Interest Options: Some companies can offer no finance options. Typically, this means that as long as the price is paid in full by a set time, no interest will be added to the cost of the equipment.
At Advantage, we offer options such as these. If qualified, this can mitigate the cost of the equipment without creating any additional cost.
Doing it on your own
If neither the contractor you’re working with nor the manufacturer you’re buying from is partnered with a bank or lending institution, you still have a few financing options:
- Personal loan
- Home equity loan or Line of Credit (HELOC)
- Credit cards
- Energy efficiency loans or grants
- Unsecured home improvement loans
- Local utility company programs
Why Do Contractors and Manufacturers Offer Financing?
HVAC professionals know that home heating and cooling is becoming less of a luxury and more of a necessity. Weather is growing more extreme each year, resulting in more heatwaves and cold snaps. As science progresses, more medical studies reveal that there are health consequences for having homes that are too hot or too cold.
As a trusted HVAC provider serving neighbors and families since 1992, we take pride in keeping your home comfortable and safe, at least as far as the temperature is concerned.
That’s why we offer flexible, convenient payment plans to remove as many barriers as possible so that the money is not an issue. If your home is not comfortable or if the temperature is posing a risk to your health, we want to do as much as we can to get a high-quality HVAC system in your home.
What are the benefits of choosing HVAC contractors that offer financing options?
Choosing a contractor or manufacturer that offers financing options for your HVAC system comes with several benefits, including:
1. Convenience & Simplicity – Financing through your contractor streamlines the entire process, providing a one-stop solution with faster approvals and less paperwork.
2. Competitive Rates & Flexible Terms – Contractors often offer special financing promotions, such as 0% interest or low monthly payments, with terms tailored for HVAC projects that may be easier to qualify for compared to traditional bank loans.
3. Additional Perks & Incentives – Many contractor financing plans come with added benefits like rebates, extended warranties, and service agreements, enhancing the overall value of your investment.
By choosing a contractor with financing options, you can enjoy a hassle-free process, better affordability, and potential long-term savings.
The Advantage Financing Process
At Advantage, Greensky provides our financing. We have found that they offer the best experience for customers in their terms, trustworthiness, and ease of use.
They also allow us to provide financing options at rates below the national average or even for no interest. This means that we can offer packages starting at 0% interest or 6.99% interest depending on qualification.
For our customers, the experience of applying for HVAC financing is straightforward.
You can complete the application over the phone or during a regular quote visit when you decide to move forward. The entire process takes a matter of minutes and you can get approved within seconds of completing the application. Your sales rep will then give you all the documents and disclosures.
Why You Would Finance Your HVAC System
Obviously, an HVAC system represents an enormous investment. Not everyone can or wants to spend that much money at once. However, stories of extreme weather are becoming more common each year. A good HVAC system is not only necessary to keep your home comfortable but also to keep your home safe.
There are three major reasons to purchase your new HVAC system with financing. They are:
- Mitigate Cost
- Keep Emergency Funds
- Build/Maintain Credit
Mitigate Cost
Much like an auto or home loan, you can finance the purchase to make it more affordable. By spreading payments out over time, you can slash the immediate cost of a new HVAC system.
Keep Emergency Funds Liquid
Another reason to consider financing is to keep your emergency funds ready in case something else happens. If you keep an emergency savings account, then you might have the cash to purchase a new HVAC system if your old one fails.
However, if this would completely drain your account, it would be too risky for when another emergency happens and it can’t be financed, like auto or repairs.
By choosing to finance your new HVAC system, you’d keep those funds available just in case something was to happen.
Build Credit
A third reason to pursue financing is to build credit or maintain credit. Credit scores are fickle and the burrows are always trying to combat ways of gaming the system. However, there is a simple truth: a credit score reflects your ability to take on and pay back debt. So, to improve that score, you need to take out and pay back loans.
Why You Would Not Finance Your HVAC System
Obviously, not everyone enjoys making purchases on credit or through financing. Sometimes it’s not beneficial. We can’t give advice, as we are not your financial advisor. If any of the following statements seem to apply, then you may want professional advice before applying to finance your new HVAC system.
- New Debt
- Another Payment to Manage
- Maintaining Healthy Ratios
New Debt
Depending on your school of thought for purchases, you may just not like debt. That’s totally alright and your HVAC sales professional should respect that.
If you do like to make purchases with debt, then you should know too many debts taken on in a short period can negatively impact your credit score.
Another Payment to Manage
Financing your HVAC system will give you another payment to manage. If you don’t want to manage multiple payments or feel you have too many payments, then you should consider this before applying.
Debt Ratios
Your ability to borrow is determined by your credit history and various other ratios. These are ratios like your Debit-To-Income and Unsecured/Revolving Ratio. Having a high debt-to-income ratio or having a high amount of unsecured debt can impact your ability to borrow. Keep track of your ratios and make sure that financing your HVAC system will not overextend you.
Tips on Finding the Best HVAC Financing Options
When looking for the best HVAC financing option, it’s important to take your time and explore all available choices.
When you’re getting quotes for the new system, make sure to check if the contractor provides different payment options and how they make it easy and affordable for you. Compare offers not just from the contractors, but manufacturers, and lenders to see which one provides the best balance of terms, interest rates, and flexibility.
Make sure to read the fine print and understand the total cost of financing, including any potential fees or penalties. Check if the provider is transparent and honest about the information.
Don’t forget to check for promotions or rebates that could help lower your costs. Ultimately, the goal is to find a financing plan that fits your budget and keeps your home comfortable without adding unnecessary financial stress.
At Advantage, we do our own research to provide our customers with the best payment plans and continuously negotiate with our financial partner to keep the options competitive. We recommend you find contractors like us in your area who are honest, transparent, and passionate about providing great value to neighbors.
Who Are Advantage Heating and Air Conditioning?
We are your local HVAC Experts out of Salem, Oregon. Our HVAC Pros travel from Albany to Hillsboro every day to provide safety, comfort, and peace of mind to our neighbors in the Mid-Valley. Don’t hesitate to reach out if you’re looking for a new system — we’re providing free consultation to identify 3-6 best options that fit your house, needs, and budget. Learn more here.
We hope that this post gave you the information you need to know about HVAC Financing. If you have other questions about HVAC systems, check out our other blogs. To learn more about who we are and how we can help you, visit our website and follow us on social media – we’re here when you need us!
