Benefits of Financing HVAC Systems

Benefits of HVAC Financing

Eventually, your central heating and cooling system will need to be replaced. However, when that time comes, your savings may not be ready! What if you could tailor your indoor comfort purchase to your monthly household budget and energy efficiency needs at the same time? That is where financing can help keep you and your wallet comfortable!

Why Finance Heating or Cooling Equipment?


HVAC financing helps spread the cost of new equipment over a predetermined amount of time. Why dip into savings you may have earmarked for another purpose, add to an existing credit card balance or even consider a home equity line of credit when you have another option? 

HVAC financing allows you to overcome the cash anxiety that often comes with upgrading or replacing your indoor comfort equipment. By financing your new purchase, you can break up payments into monthly installments, leaving your cash available for something you cannot finance. 

As with any purchase spread out over time, it’s essential to review financing details to make sure you understand your financial responsibility. You should consider the interest rate, repayment terms and the “small print” in any potential financing contract.

Smart Money Management


Your HVAC buying decision should be based on long-term comfort and energy-efficiency. Enhanced energy savings can result in real, tangible returns when you invest in a high-efficiency system, especially when compared to your old unit or base-efficiency units.

While your frugal urges may tempt you to opt for a minimum efficiency system, the least expensive option may not be the most cost-effective solution considering the long-lasting life cycle of a new, energy efficient system. New, high-efficient systems may offer reoccurring monthly savings on your utility bill and possibly increase the value of your home. The increase in the monthly financed payment may be realized in your energy bill. 

A high-efficient system can also provide uncompromising indoor comfort throughout your home, allowing you to feel the difference compared to your old unit. Impactful innovations such as variable-speed fans, variable-speed compressor and heat exchanger technology have ushered in a new era of HVAC operation that enhances indoor comfort and performance.

Moreover, HVAC financing can often cover the cost of an extended service plan. Extended service plans may minimize additional out of pocket maintenance or repair expenses that you may face during the term of the service plan.

What Do I Need for HVAC Financing Approval?


Depending on the local contractor’s financing company, amount financed or terms of service, you may need to provide personal information and be subject to a credit check. Ask the dealer to provide complete information before you make a final decision about HVAC financing. 

“Each lender differs in what is required for loan approval,” says Erin McCollum, Director of Contractor Services for EGIA. According to McCollum, typical customers who are approved for an HVAC loan may have:

  • “Fair to excellent” credit profiles
  • Debt to income ratio under 50%
  • No recent history of bankruptcies


Common Financing Terminology*


  • APR (Annual Percentage Rate) - The interest charged on the loan
  • Debt to Income Ratio - The amount of a borrower's debt divided by their income
  • Equal Monthly Payments at 0% APR - A loan that is paid in equal monthly payments over a specific term with an APR of 0%
  • Fixed Interest Rate - A fixed percentage of interest that is paid over the loan term
  • Interest - Payment for the use of money over time or the amount a borrower pays to borrow money from the lender
  • No Interest, No Payment Loan - A loan in which no payments need to be made within a specific promotional time period.  If the balance is not paid at the end of the promotion period, the borrower usually pays off the interest from the loan start. 
  • Sub-Prime Loan - A loan given to a borrower who does not meet the credit requirements for a typical loan.  Sub-prime loans have higher interest rates because they finance borrowers who may have a poor credit history, low income, and high debt to income ratios
  • Term - The time length the loan will run 
  • Unsecured Loan - A loan that is given and based on a borrower's credit instead of collateral


* Terminology was provided by the Electric & Gas Industries Association (EGIA), a non-profit organization dedicated to advancing energy-efficiency and renewable energy solutions through the home improvement and renewable energy industries.