The demand for HVAC units has been rising, with over 151 million HVAC units expected to be sold in 2024. In Canada alone, the annual demand for AC units was 460,000 as of 2018.
HVAC units are a necessity in most homes and businesses. But a top-quality HVAC unit doesn’t come cheap.
A central air conditioner alone goes for $5,700 on average, with heat pumps costing up to $3,000 more on average. Ductwork installation alone can set you back between $3,000 and $10,000.
Without HVAC financing, many Canadians would struggle to purchase these essential appliances. Of course, you can always opt for air conditioner rental and furnace rental, but there are lots of benefits that come with owning the unit fully, and HVAC financing helps you do just that.
So, what financing options are available for HVAC customers? Read on to learn more.
Personal Loan Financing
Many Canadian homeowners use personal loans to finance various types of home improvements. Consumers love this approach to HVAC financing because of how fast and affordable it is, especially when you need to cover a surprise expense, such as replacing an HVAC unit that has suddenly broken down.
Before applying for a personal loan, note that the interest rates will vary based on your credit. Some lenders will even offer attractive discounts for consumers with a certain amount of retirement savings.
Personal loans also attract origination fees and have a fixed payment schedule. In many cases, these loans have a term of up to 60 months. Of course, you can find more flexible HVAC financing options with payment terms of up to 15 years.
In most cases, personal loans are unsecured, meaning that your assets aren’t at risk. However, lenders will carefully look at your income, credit, and employment to determine your eligibility for the financing.
Credit Card Financing
For people with a high enough credit card limit, financing their HVAC using their credit card is a viable option. This idea is especially smart if you intend to pay off the debt quickly and avoid the high-interest charges.
But if you can’t afford to pay off the credit card balance within a short time, then this financing option can prove expensive in the long run. That’s because credit card rates typically tend to be much higher compared to other loan types. Besides, maxing out your credit cards can negatively impact your credit score.
On the plus side, credit cards offer considerable flexibility as they don’t have a set repayment schedule.
If using a credit card seems like the best way to finance your HVAC purchase, consider getting a new card that comes with a no-interest introductory period. With such a product, you’ll pay zero interest on the loan, provided the balance is paid off during the promotional period. The longer the promotional period, the better.
Manufacturer’s Financing Program
Many top HVAC manufacturers offer in-house financing for their HVAC products. You can also find dealers and retailers who provide zero-interest financing for HVACs on-site.
Essentially, these financing programs are personal loans or credit cards offered to consumers through the dealer or manufacturer. Talk to various heating and cooling companies to determine whether they have financing options you can take advantage of.
Home Equity Financing
Tapping into your home’s equity is another popular way Canadians use to finance home upgrades, including paying for such heating and air conditioning services as HVAC installation. If your home’s current market value surpasses the balance you owe on your home loan, you have equity.
One of the benefits of using home equity financing is that the interest rates are generally lower than personal loans. That’s because the loan is secured by the house.
Of course, the main drawback is that you put your home at risk of foreclosure if, for some reason, you can’t make the required monthly payments.
Among the ways you can borrow money against home equity include:
Home Equity Loan
This type of loan is essentially an additional mortgage that’s secured by your property’s equity. It’s the reason the loan is sometimes referred to as a second mortgage.
The lender typically gives you the money in a lump sum. Thus, you’ll be required to pay interest on the loan amount from the start. But because there’s collateral in the form of your home, the interest rates are lower.
Home Equity Line of Credit (HELOC)
Similar to your ordinary credit card, a HELOC gives you a credit line to borrow against. There’s a credit limit up to which you can borrow. That limit is generally calculated based on the amount of home equity you have, among other things.
Your home is still used as collateral, which means that interest rates are lower than unsecured loans. The funds available through HELOC can be used to buy an HVAC.
You can also opt not to take a second mortgage and instead refinance the existing mortgage. Here, you get a new mortgage for a higher loan amount, and the lender gives you the difference between the two mortgages in cash. You can use this cash any way you want, including financing your HVAC purchase.
Choose the Right HVAC Financing Option for Your Needs
When the time to replace your HVAC comes, you don’t need to worry about coming up with the money needed to fund the purchase. There are plenty of financing options available to you, including personal loans, credit cards, dealer’s financing, and tapping into your home’s equity. Take the time to compare these options, and pick one that worlds best for you.
Would you like help with HVAC financing? Please, contact us today and take advantage of our unbeatable offers.