How to Finance an HVAC System

Posted by in Loans | Updated on May 30, 2023
At a Glance: HVAC financing means getting a personal loan to buy a home HVAC system. There are alternatives to a personal loan, including dealer financing, interest-free credit cards, and government assistance from the Department of Housing and Urban Development.

In extreme climates, an HVAC system may be the difference between a comfortable and an unlivable home. Read on to learn a bit more about the various options for HVAC financing.

What Are HVAC Loans? 

HVAC (heating, ventilation, and air conditioning) systems are quite expensive. HVAC loans are usually just unsecured personal loans that you use to buy an HVAC system. 

The system itself does not serve as collateral for the loan–your credit score does. That means that all the requirements and considerations that apply to personal loans, in general, apply to HVAC financing. 

5 HVAC Financing Options

HVAC financing is essentially getting a personal loan and using it to buy an HVAC system. Any lender that offers unsecured personal loans is an option that you can explore for HVAC financing. Below are a few typical personal loan lenders.


Upgrade offers tools to help you understand and improve your credit. In terms of loan eligibility, Upgrade requires a FICO credit score of 560 or more, along with good, consistent cash flow; your debt-to-income ratio must not be above 75%. 

Upgrade charges both an origination fee between 1.85% and 8% as well as failed and late payment fees of $10 each. If your loan is approved you will have between 2 and 7 years to repay it.


LengingClub’s loan offerings are targeted mostly at people with a FICO credit score of 600 or more. If you are unsure whether you qualify, you can apply for pre-qualification. 

LendingClub requires a debt-to-income ratio of 60% or more if you are applying alone (40% for a joint application). If your application is approved, you pay an origination fee of between 1% and 6%, and you will have between 3 and 5 years to repay the loan. Late payments will attract a 15% or $15 fee.


LightStream specializes in lending to people with very good credit. Their loan products do not come with any origination or late payment fees. However, the minimum credit requirement is 660. 

If your application is approved you will have between 2 and 7 years to repay the loan and you can get a small discount on your interest if you set up an autopay facility for the installments.

Wells Fargo Personal Loan

Wells Fargo personal loans are only available to customers of the bank. This lender does not charge an origination fee but does charge a $39 fee for late payments. If approved, your loan term will be between 1 and 7 years. 

Discover Personal Loans

Discover personal loans are open to you if you have a FICO score of 720 or more. In addition to the minimum credit score, you must also demonstrate a minimum household income of $40,000. 

If your application is approved you will have between 3 and 7 years to repay the loan, with a $39 fee for any late payments.

Considerations to Keep in Mind with HVAC Loans

When you have the loan details, pay attention to the following factors:

  • APR: Generally, the loan with the lowest APR is the least expensive, even if it isn’t the one with the lowest interest rate.
  • Repayment period: This is the total length of time to pay off the loan. Shorter repayment terms often lead to higher monthly payments but potentially lower APRs.
  • Discounts: You may be eligible for discounts if you have an existing relationship with the lender, or if you make special arrangements, such as automated loan repayment.
  • Monthly payment: The monthly payment determines whether you will be able to make the payments for the loan along with your other expenses. Extending the repayment period can lower the monthly payment.
  • Fees: Some lenders charge fees, such as prepayment penalties. Be aware of these so you are not caught by surprise.

Once you have all the details, you can choose the loan which is the least expensive and suits your needs best.

HVAC Loan Alternatives

Although the most common solution to the HVAC financing option is a personal loan, there are some alternatives you can explore. A few of these are listed below.

  • Emergency fund: Most financial advisors suggest that everyone saves a small amount of money every month to cover unexpected but essential expenses, such as replacing a broken-down heating system in winter.
  • HVAC company financing: Many HVAC system manufacturers or their dealers offer HVAC financing through third-party lenders. Depending on the details of the financing deal, this could be a more attractive option than a personal loan. Contact your local HVAC companies to compare offers.
  • Credit card: If you have good credit, you may qualify for a credit card with a low or 0% APR. It is important to understand how long the promotional low or no interest period of your credit card is. If you fail to pay the outstanding balance at this time, you may end up having to pay penalty fees and interest.
  • Government assistance: In extreme climates, HVAC systems can make the difference between a comfortable and an unliveable home. FHA Title 1 loans from the Department of Housing and Urban Development can be used to finance an HVAC system. You could also refinance your mortgage with an FHA 203(k) loan and potentially save money. It is important to read and understand all the guidelines and requirements for these programs before you commit.

HVAC Financing FAQ

The questions below often come up when discussing the topic of HVAC financing.

Can I afford a new air conditioner or furnace?

It depends on your home, the climate in your area, and your financial position. There are situations, especially in extreme climates, where replacing an older HVAC system with a newer one can save you money in terms of operating and repair costs, despite the upfront investment required.

Do I need perfect credit to get HVAC financing?

Not necessarily. Different lenders have different credit requirements. Generally, the lower your credit score, the more interest your loan will attract. 

Do HVAC companies offer to finance?

Yes, but not all. It is not guaranteed that all the HVAC companies in your area will offer HVAC financing, but many HVAC companies do. Contact HVAC system dealers in your area to see what financing offers they have.

What credit score do you need to finance an HVAC system?

Whether there is a minimum credit score depends both on the type of loan and the lender you choose for HVAC financing. Some personal loan lenders will approve your application even with a low credit score if you meet other requirements.

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Final Thoughts 

HVAC financing generally means getting a personal loan to buy an HVAC system for your home. There are alternatives to a personal loan, including dealer financing and government assistance from the Department of Housing and Urban Development. In extreme climates, HVAC can be the difference between a comfortable and an uninhabitable home. Sometimes, replacing an old HVAC system can save you money in the long run by decreasing operating and repair costs.