Purchasing and installing a new air conditioning system can be an expensive project. Depending on the type of equipment needed, the total cost can easily come to thousands of dollars. Unless you have plenty of money set aside for the task, chances are you will need to check into different financing options. Fortunately, consumers usually can choose from options offered through the HVAC contractor and the local bank or finance company.
Contractor Financing
It is not unusual for air conditioning contractors to offer at least one financing option to their clients. When this is the case, the entire cost of the project is bundled into a single amount and then repaid in monthly installments. That total amount will include the cost of the air conditioning unit, any additional supplies used during the installation and interest assessed on the loan itself.
Unsecured Bank Loan
For people who have excellent credit, there is always the option of obtaining an unsecured loan from a local bank. If you have a long standing relationship with a bank, talk with a loan officer and see what the bank has to offer. You may find that the bank considers you an viable risk and is willing to extend an unsecured loan at a very competitive rate of interest. Compare that rate to the financing available through the contractor. There is a good chance the total fees and interest on the bank loan will be considerably less, allowing you to save a lot of money over the duration of the financing.
Secured Loans
If your credit is less than perfect, the bank may require some sort of collateral before extending the financing for your new air conditioning system. If you own your home free and clear, you can always use it as security. Some banks will also accept assets such as the balance in a savings account. Assuming you have a vehicle that is not attached to a car loan and has a market value more than the cost of the new system, the lender may be willing to accept that car or truck as collateral.
One benefit of the secured loan is that you can still lock in a reasonable rate of interest. Since the pledging of collateral means the lender is assuming a lower amount of risk, the interest rate extended will reflect that fact. Even with this type of arrangement, you may find the secured loan is a better deal than the financing offered through the contractor.
Home Equity Loans
If you have a significant amount of equity in your home, you may be able to obtain an equity loan from the mortgage holder. Talk with a representative at your mortgage company and see what he or she can do for you. Since the loan is directly related to a home improvement that will increase the market value of the home, there is a good chance of being approved. In addition, the rate of interest may be extremely affordable. This would allow you to retire the debt in a shorter period of time without creating a lot of stress on the household budget.
Compare All Your Financing Options
Don?t make any assumptions about your ability to manage the financing on your own. Before taking it for granted that the loan plan offered through the contractor is the best deal you can expect, make a few calls and get some quotes from other lenders. Doing so could mean lower monthly payments and the ability to pay for your air conditioning Salt Lake City system in full sooner rather than later.
Tags: Heating and Air Conditioning
Source: http://icezen.com/how-can-i-finance-my-new-air-conditioning-system/
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