Is Financing for HVAC Replacement the Best Choice for You?

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  • 21 Dec, 2022
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Is Financing for HVAC Replacement the Best Choice for You?

Do you need a new HVAC unit? Here at Aspire Heating & Cooling, we can help you choose the best HVAC system for your home. We can even assist with financing for HVAC replacement. Our financing team works hard to find you the best financing terms that are available.

What is Financing for HVAC Replacement?

Simply put, HVAC financing is when you use a personal loan to pay for a new HVAC unit. You repay this loan over time (usually two to six years) in regular monthly payments. Therefore, HVAC financing is a way to get a new HVAC system when you need it, even if you don’t have the money to pay for it upfront.

Financing is possible for ductless units as well as traditional heating systems and air conditioning systems.

Advantages to HVAC Financing

The first and most obvious benefit of financing your new heating unit and/or air conditioner is that you don’t have to wait to replace an older, broken unit. Here in North Carolina, we experience a wide spectrum in outdoor temperatures. If your HVAC unit breaks down during the winter, you could experience dangerous freezing temperatures. On the other end of the spectrum, if your air conditioner breaks down during the summer, you could have to deal with dangerous triple-digit temperatures. Either way, your home will be uncomfortable until you replace the broken unit. Without financing, you may need to wait several months to afford the HVAC replacement.

Even if you have the money in your bank account to pay for a new HVAC system outright, you may still wish to apply for financing. Here are a few reasons why:

  • You don’t want to wipe out your savings. You may need that money for something else where a loan isn’t an option. With HVAC financing, you can continue to have a healthy bank account with money for a rainy day.
  • HVAC financing helps you build good credit. All you have to do is pay your monthly payment on time every month. (More on this later!)
  • With an HVAC loan, you may be able to afford the system you really want, instead of settling for the one you can afford at the time. We take pride in only providing top-of-the-line HVAC systems, but some are more expensive than others. It’s always nice to have options.

If you’re on the fence, let us know, and we can walk you through the pros and cons of financing versus paying out of pocket. There’s no one right answer that applies to all homeowners.

How HVAC Financing Helps You Build Credit

Earlier, we mentioned that HVAC financing can help you build credit. It’s one of the main benefits to choosing a loan instead of paying out of pocket.

You build credit by repaying loans over time. This shows future lenders that you are responsible with making payments. In other words, you’re a less risky investment. Your credit history is often expressed as a number (your credit score), but a single number doesn’t tell the entire story. Lenders will also look at your complete credit history to make a decision about whether or not to offer you a loan.

The more responsible you look on paper, the more likely you’ll get approved credit. This can come in handy if you plan to buy a new home or second home, finance a car, apply for business loans, or even get a store credit card.

Having a good credit history can even help you secure a job. Some employers look at your credit history and consider it when determining whether or not you are a good fit. This is most common if you’re applying for a job that requires a high level of trust and handling large sums of money.

As an added bonus, a better credit report also means you’ll pay less in interest on future loans, credit cards, and other lines of credit. You will get a better interest rate when you have a history of making monthly payments on time. So, building your credit is extremely important.

There is where we come in!

In order to build your credit, you need to repay loans consistently over time. If you pay for your new HVAC upfront, it will not affect your credit score either way (positively or negatively). But if you pay using HVAC financing, you’ll positively affect your credit, as long as you make your monthly payments on time.

We work with homeowners who have a wide range of credit scores. If your credit history isn’t perfect, we can still help you. We have traditional HVAC financing for people who qualify. However, we also have lease-to-own options for people working to rebuild their credit. Our goal is to help you get approved, no matter what your situation.

Other Financing Methods for Your New HVAC Unit

Direct HVAC financing and lease-to-own options through Aspire are not your only HVAC financing options. We can also replace your unit if you use an outside lender. For example, you may want to use a home equity loan or home equity line of credit. Additionally, you can seek a personal loan (sometimes called a home improvement loan) through special financing with your bank or another lender.

First, let’s talk about options with your mortgage company. A home equity loan is similar to a traditional loan, such as the loans we offer through our lending partners. You make payments every month, which consist of the principal plus interest. A home equity line of credit is more comparable to a credit card. With this option, you have a total amount available to you (your credit limit), and you use that credit and pay as you go. As with a home equity loan, you’ll pay for the amount you spend plus an additional amount as interest.

In both cases, your house is the collateral. Equity builds over time as you pay your mortgage and as the value in your home increases. So, if you have $100,000 remaining to pay on your mortgage, but your home has an appraised value of $150,000, you have $50,000 worth of equity. Most lenders will approve home equity loans and lines of credit if they are well below the amount of equity you have built. Lenders like to see you making improvements that will increase the value of your home, like replacing the HVAC system. In many cases, you can get a lower interest rate if you choose a home equity loan or line of credit.

However, there are a few reasons this may not be a good option for you.

  • You may want to use your equity in another way, when other loan options are not available. If you have other home renovations planned, you may not want to use your equity to finance your HVAC replacement
  • The interest rate may not be as good as the one we offer. So, you could end up spending more money if you go through another lender.
  • Your bank or another lender could require you to pay for an appraisal before approving your loan or line of credit.
  • In some cases, you could be denied for the loan or line of credit. This is especially common if you’ve been late on mortgage payments in the past.
  • You could have to repay the loan faster, which means higher monthly payments.
  • Some lenders charge a fee if you try to repay the loan early to avoid interest payments.
  • You may not have much equity in your home. If you recently purchased your home, you likely don’t have much equity. Likewise, if you live in a neighborhood where home values have been decreasing, you might not have much equity in your home.

With a personal home improvement loan, you could face some of the above disadvantages as well. The main difference is that with a personal loan, you typically do not use your home as collateral, and you’ll work with an outside lender instead of a bank.

When looking for financing for HVAC replacement, we recommend comparing several options. Check out what we have to offer and compare it other lending options. Look at the interest rate, repayment term (i.e., how long you’ll have to repay), monthly payment amount, associated fees, and more.

No matter which option you choose, we can install your new HVAC system!

How Much Does Financing Cost?

The exact cost of your new HVAC unit will vary based on several factors. Financing allows you to pay for the unit with little to no initial costs (although many people do choose to make a down payment). However, keep in mind that financing isn’t free. Lenders make money by charging interest.

So how much does interest cost?

This also depends on several factors. In general, the better your credit, the lower your interest rate. Other factors that can affect your interest rate include the size of the loan and the repayment term.

Additionally, some lenders simply charge more. That’s why we suggest shopping around if you’re going to be financing your HVAC replacement. We want you to get the best deal, even if it isn’t with one of our lending partners. You may find, though, that our established relationships with quality lenders will allow you to get the best financing terms.

HVAC Options for Homeowners

The Aspire team has experience with all types of residential HVAC systems. The two main types you’ll want to consider are a traditional central air system and a ductless system.

With a traditional HVAC unit, you’ll have an outdoor unit with ducts that run through your home. Warm or cool air is forced through vents in your home using fans. You use a central thermostat to adjust the temperature. We have several thermostat options with different features such as timers, remotes and scheduling.

Ductless units are perfect for older homes that were not built with space for ducts. It can be a massive project to add ducts to an older home. Instead, you can install ductless units in individual rooms to provide zone-controlled cooling. Each ductless unit is connected to an outside unit with just a tiny hole in the wall. You can control the units independently to provide the right temperature in the areas of the home you use most.

In both cases, our team can assist with financing. Whether you have good credit, bad credit, or something in between, we have financing options for you.

Do You Need to Replace your HVAC Unit?

Before you go through the process of applying for any financing option, we recommend a free consultation with a member of our team. In some cases, you may not need to replace your HVAC system at all.

Some HVAC companies jump to recommending replacement because it is a big job worth more money. However, the reality is that a replacement isn’t always in your best interest. You may need repair instead, which can be less expensive. We only recommend replacement in a few situations. Here’s when you should replace your unit:

  1. The repairs you need for a functioning unit would cost more than just replacing with a new unit
  2. Your home’s air quality is severely compromised due to an older unit, and this cannot be rectified with cleaning or repairs
  3. Although repairs would fix the immediate problem, the unit shows signs of needing more repairs soon (typically the case with very old units)

In other words, it only makes sense to replace your unit if this is the least expensive option to provide your home with a functioning unit and good air quality. When you call the Aspire team with a problem, we will repair instead of replace, whenever this is possible.

Regardless, we are happy to explain all repair and replacement options after our initial review of the problem. Our team is experienced with explaining HVAC issues in easy-to-understand terms. You’ll have all the information you need to make the best decision for your home.

When it comes time for the installation of a new unit, our NATE-certified technicians handle the project efficiently, quickly, and with total respect for your property. We can explain in great detail, but no one says it better than our satisfied customers. Read some reviews from clients who have had work done by our team.

Do you have a business that requires a larger, commercial system? We handle both residential and commercial repairs and installation. No project is too large or too small to receive our expert attention.

Aspire is a family-owned business, serving the greater Winston-Salem area. As a local, veteran-owned company, we are focused on customer service. We are your neighbors and want you to refer your friends and family to us. Thus, every job is important.

If you do choose HVAC financing, we’ll walk you through this process as well. No question is too basic. We want you to be informed. Otherwise, you might end up overspending on a system that is not right for you.

Are you ready to learn more? Fill out the form above to request a free consultation. Or, just give us a call at 336-281-0047.

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