Best HVAC Loans & Financing

Replacing your heating, ventilation, and air conditioning (HVAC) system truly is a matter of time and money. You'll probably need a lot of money and, depending on the current weather, you may need it as soon as possible.

For those reasons, the best lenders for HVAC loans offer large loan amounts and quick funding in addition to affordable rates and flexible repayment terms. This article covers the best personal loans for HVAC financing, how much you might have to spend, and some alternatives to personal loans.

Best HVAC loans

What are HVAC loans and how do they work?

An HVAC loan can be any type of financing used to pay for a residential heating, cooling, and ventilation system. Financing options can include personal loans, home equity loans, home equity lines of credit (HELOCS), credit cards, and dealer or contractor financing. 

HVAC loans provide the money you need to pay for your HVAC replacement or installation if you can't afford the cost upfront (which the typical homeowner probably can't).

You'll need to repay the loan over time, often with interest, depending on the borrowing method you choose. The cost of borrowing is typically calculated as an annual percentage rate (APR), which accounts for both the interest rate and any upfront lender fees.

Compare the interest costs, repayment terms, fees, and eligibility requirements of different types of HVAC loans before making a decision.

Types of HVAC loans

You have several options for financing your new HVAC system, including:

Personal loans

Personal loans provide a sum of money that you repay in fixed monthly installments over a period of years. Some home improvement loans have repayment terms for up to 20 years, depending on the lender. Personal loan interest rates typically range from less than 7% APR to as much as 36% APR. Factors that influence the APR you qualify for include your credit score, income, and overall credit history.

Home equity loans and lines of credit

Home equity loans and home equity lines of credit (HELOCs) let you tap the equity in your home. They tend to come with lower rates and longer terms than personal loans, because your home is used as collateral. But equity-based loans can involve time-consuming appraisals and high closing costs. You also risk foreclosure if you can't make your payments.

Credit cards

While credit cards often have high interest rates, you may be able to qualify for a 0% introductory APR offer on a new card if you have good credit. This type of offer could give you up to 21 months to repay the cost of your HVAC installation without interest. Just make sure you can pay off the balance before the promotional period ends and the card's regular APR goes into effect.

Related: 0% APR Credit Card vs. Personal Loan

Manufacturer or contractor financing

Your HVAC contractor may offer financing options, either through a partnership with a lender or through the HVAC manufacturer. These options may have a low-interest or interest-free period, depending on the company.

Government-backed loans

Federal agencies such as the Department of Housing and Urban Development offer assistance with home improvement loans to eligible borrowers. Some types of loans may be used for purposes that include enhancing a home's livability and safety, such as improvements to HVAC systems. Also, some state programs sponsor low-interest loans for energy-efficient home improvements.

Average home improvement loan rates

If you're considering a personal loan for home improvement to finance your HVAC project, your credit score will play a significant role in the interest rate you qualify for. The chart below shows the average APRs on personal loans for home improvement, by credit score, according to 12 months of Credible data on closed personal loans. Bear in mind that the data covers all home improvement loans, not just loans specifically related to HVAC projects.

How to compare HVAC loans

When comparing HVAC loan options, it's important to consider the following:

• APR: The annual percentage rate indicates how much you'll pay annually to borrow the money, including interest and upfront lender fees. Once you narrow down your options based on eligibility and the loan terms you need, choose the lender that offers you the lowest APR. Prequalify with multiple lenders to compare APR estimates on personal loans.
• Loan amounts: Some loan types and lenders offer higher loan amounts than others. Look for lenders that offer the amount you need to fund your HVAC purchase and installation.
• Repayment terms: Consider how long you'll need to repay the loan. Generally, a shorter term will save you money on interest, while a longer term can keep your monthly payment low.
• Fees: Many personal loan lenders charge origination fees, and home equity loans and HELOCs typically come with closing costs.
• Cosigner option: If you have bad credit, you may need help qualifying for an HVAC loan. A friend or relative with good credit can cosign the loan, which could make it easier for you to qualify or reduce your interest rate. But it also makes them fully responsible for the loan if you can't make the payments. If you go this route, make sure the lender allows cosigners.
• Time to fund: Time is of the essence when you're surviving hot or cold temperatures. Some loan types, like manufacturer financing, may be instant, and some personal loan lenders can offer same-day financing. But others, like a home equity loan, can take more than a month to fund. Consider how quickly you need the money when choosing a loan type and lender.

Pros and cons of HVAC loans

Although replacing an old or damaged HVAC system is probably a matter of necessity, it’s important to remember the advantages and disadvantages involved in financing.

How to qualify for an HVAC loan

The eligibility requirements for HVAC loans vary depending on the loan type you choose and the lender. For a personal loan, you’ll need to meet lender criteria that generally include:

Minimum credit score

Use Credible's credit-monitoring tool to check your credit score for free and see how it matches up with lenders' minimum requirements. Many lenders require good credit or better, but others may consider loans for fair-credit and even poor-credit applicants, especially if you apply with a cosigner or offer collateral.

Income requirements

Many lenders have minimum income requirements. You’ll generally need a verifiable source of income to get a personal loan.

Positive payment history

Lenders tend to check your credit report for late or missed payments. These can hinder your ability to get a loan or increase your rate. Payment history accounts for 35% of your FICO score, the most of any other factor.

Debt-to-income ratio (DTI)

Your debt-to-income ratio shows how much of your monthly income you spend on debt repayment. If it looks like you’re already struggling, you might not qualify. For personal loans, lenders generally prefer a DTI below 36%.

Related: How To Get Approved for a Personal Loan

How to get an HVAC loan with bad credit

Getting an HVAC loan with bad credit can be a challenge, but not necessarily an insurmountable one. Start by comparing lender requirements and prequalifying for bad-credit personal loans. If you’re not eligible for any of the options, consider applying with a cosigner or choosing a loan that requires collateral. Secured loans are often easier to qualify for, though fewer lenders offer them.

If those options don’t pan out, consider other options such as a 401(k) loan or a life insurance policy loan, or borrowing money from a family member. You can also take steps to improve your credit score and boost your savings.

How much does a new HVAC system cost?

Installation of a new HVAC system costs an average of $7,500, according to home services marketplace HomeAdvisor. The website also estimates that the normal price range runs from $5,000 to $12,500 with a high of $22,000, depending on factors such as size, efficiency, and labor costs.

Methodology

Credible evaluated 32 lenders across 1,216 data points to find the best HVAC loans. Our primary focus was on lenders that offer personal loans for home improvement or large purchases. We chose the best lenders based on the following weighted categories:

• Rates and fees: 18.75%
• Eligibility and options for bad and no credit: 17.5%
• Availability: 12.5%
• Loan amounts and terms: 10%
• Customer satisfaction: 10%
• Customer service: 10%
• Efficiency and fund delivery: 10%
• Discounts: 7.5%
• Credible proprietary data: 3.75%

Credible's team of experts gathered information from each lender’s website and from our partners directly. We also considered each of our partner lenders’ statistics over a 12-month period — including average funding times, average credit scores for approved applicants, and average rates. Each data point is verified by a senior editor to make sure it’s accurate at the time of publication. 

Learn more about how Credible rates lenders by exploring our personal loans lender rating methodology.

Disclosure: Some lending partners that participate in Credible’s comparison marketplace offer loans to borrowers with scores as low as 550. Borrowers with low scores will have fewer lending options than borrowers with higher credit scores.