A Quick Guide to AC Financing
Is your air conditioner or heater malfunctioning more frequently?
At least 60% of Canadian homes have at least one type of air conditioner. If it breaks, they will spend hundreds of dollars on repairs. Sometimes, the expenses are too much.
Through AC financing, the cost of repairs becomes more manageable. Continue reading below for a quick guide to HVAC financing.
AC Financing Options: In-House
AC financing comes in different forms. The first is the in-house type. The AC retailer offers loans to customers who bought their products.
Before approving your loan, the lender will check your current financial standing. They will review your income, credit score, and debt level. Upon approval, they will give a payment schedule.
This option is popular for households with AC units beyond repair. In-house financing prevents you from paying for a new AC unit in cash.
Before applying for in-house financing, examine the details. Review the payment terms, interest rates, and other fees. It’s the best way to avoid paying more than what you can handle.
Home Equity Loan
A home equity loan is a great alternative for homeowners. It allows you to get funds from your home’s equity. With this, you’ll get enough money to buy a new AC unit or heater.
Another similar option is the home equity line of credit (HELOC). It works the same way as a home equity loan. The primary difference is a HELOC features a credit limit.
You can withdraw within the limit and pay the interest.
A large unsecured loan is the trickiest among the three options. It doesn’t involve any collateral. In turn, it comes with more financial requirements.
Compared to a secured loan, it comes with a higher interest rate. Unsecured loans also pose many other risks.
Some lenders charge big upfront fees. Others may penalize you for paying off your loan early.
Benefits of HVAC Financing
Financing an AC system offers various benefits. You can get a better model than your last heater or air conditioning system. Sometimes, spending on repairs may cost you more in the long run compared to buying a new unit.
Financing also eases the burden of paying. If you have insufficient cash for an extensive repair or replacement, financing will spread out the cost.
AC financing also improves your credit rating. After all, securing a loan is an opportunity to increase your credit scores. It’s only possible when you pay them on time.
Some HVAC retailers offer guaranteed approvals. They give this to homeowners since they’re less likely to default. Other lenders offer monthly payments lasting up to 15 years.
Increase Your Financial Knowledge
AC financing makes repairing or replacing your HVAC system easier. You can get a good unit without having to pay in cash. It prevents you from spending more money on a dysfunctional unit.
Did you find this guide helpful? Consider reading our other posts for more.