An air conditioning unit is the only thing separating you from being miserably hot this summer. However, it can also be a very costly investment. Luckily, AC unit financing comes in a few different forms to help you pay for installing this expensive but vital part of your home.
Credit Cards
Even with the most generous of credit lines on your card, using them to fund an AC unit can not only be costly, but disastrous to your credit score. Your credit score is decided by a number of factors, but 30% of that score comes from your amounts owed. If you have good credit standing, you may also have a higher interest rate than you would’ve gotten from a bank or other financial institution. You’ll need to find a fair rate that fits within your budget before putting a credit card down.
Contractor Financing
The second option is contractor financing, where a contractor offers to pay off all finances for the installation and equipment. While seeming like a good idea from the outset, always be sure to study the terms of the provided finances, and to weigh them against your other options. Unless you’ve carefully reviewed repayment terms, interest rates, and the fine print of any financing you consider, financing home improvements can prove potentially risky. You want to make sure your contractor hasn’t put a lien on your home, as this can lead to foreclosure if you cannot repay your loans.
Home Equity Loans
Your third option is a home equity loan and other options similar. These can provide financing for home improvements at lower rates than other, less secured loan options. However, it’s important to weigh the pros and cons of tapping your home equity for financeable items without having to mortgage your home and reducing the safety net home equity provides.
Financing With a Personal Loan
If the three above don’t interest you or are unavailable to you, you can try a personal loan from your local bank or other financial institution. A personal loan will allow you to install the AC unit without having to use your home as collateral. A personal loan’s specific amount and fixed interest rates make it best suited for one-time home improvements, such as installing an air conditioning unit.
An AC unit is a completely vital and necessary addition to your house. But before buying one, be sure to shop around to get the best deal possible on contractors and equipment. An eco-friendly air conditioner can save you big in the long run.
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