Like anything else in your Gilbert, AZ, home, an HVAC system can break, leak, or otherwise fail due to several factors, including old age. However, there is no guarantee that you’ll have the money needed to replace an aging furnace or repair your existing ducts on short notice. Even with excellent budgeting, there will be unforeseen circumstances that you didn’t plan for. Fortunately, you may be able to use financing for your upcoming project to ensure that it gets done in a timely manner.
Spread Out the Cost of the Project
Perhaps the best reason to obtain financing for your upcoming HVAC project is that it allows you to spread out the cost over months or years. Instead of paying $10,000 for a new furnace today, you can pay a few hundred dollars each month until the balance is paid in full. This can be a convenient budgeting tool if you’re working with a limited income.
Financing can be ideal even if you have the means to pay the full price upfront. Typically, the interest rate on a home improvement loan is going to be lower than the return you’d get on your money if you left it in your traditional bank account or in stocks. Therefore, it may be smarter to use the lender’s cash to make improvements to your home without jeopardizing your retirement fund.
Alternatively, you may feel like it’s better to keep money in your savings account for future emergencies. Making payments every month means that you still have money in the bank to pay for car repairs, medical bills, or other costs that will likely come up in the future. You’ll want to consider the amount of your project and your current savings.
Avoid a Prepayment Penalty
Most homeowners can usually pay off a loan before the scheduled due date without paying a penalty. This means that you can make extra payments if you’d like to minimize the amount of interest paid on the loan.
For instance, you could choose to put the bonus you just got from work toward the loan balance or use your tax refund to pay it off entirely weeks after obtaining financing. If you’d like, you can simply make your minimum payment to remain in good standing until the balance is paid off.
You Won’t Pay Forever
A home improvement loan is akin to most other personal loans in that it has a fixed end date. This is different from a credit card or line of credit, in which you only pay 1% of the balance plus an interest charge for an indefinite amount of time.
Essentially, you know how much interest you will pay over the life of the loan and how many payments you’ll need to make ahead of time. This makes it easier to budget around this debt both now and for several years into the future.
Don’t Forgo Necessary Repairs
Cost is often a key factor in deciding whether to replace a furnace or central air unit or simply repair it. The same might be true when deciding whether you want to replace your ducts or take actions that may represent short-term solutions to a large problem.
When you have the money you need to do the job, it’s easier to do the work that your home needs. Ultimately, you minimize or reduce the risk that an issue will get worse in the weeks or months that you spend saving up the money needed for a given project.
Although opting for repairs might be the less expensive option today, it is almost certainly the most expensive option in the long run. This is because you’ll still need to replace a furnace or condenser unit eventually. Ultimately, you are paying twice for parts and labor, which is essentially a waste of money.
Home Improvement Loans Are Relatively Easy to Get
Compared to other loan types, a home improvement loan is relatively easy to get if you have an adequate credit score and a steady source of income. This is because lenders know you’re unlikely to default on a loan for something associated with your home.
You may also be able to pre-qualify to determine what your interest rate and maximum loan amount are before you apply. Doing so allows you to compare your options and make a borrowing decision with confidence.
Home improvement loans will often have lower interest rates than credit cards or other types of personal loans. Therefore, you won’t pay as much in finance charges, which keeps the actual cost of a new furnace or HVAC components to an amount you can afford.
Loan options may be available to those with bad credit or a limited credit history. This may not be true of other personal loan companies, credit card providers, or other lenders that you might otherwise choose to work with.
There Is Typically No Need for Collateral
Typically, HVAC financing is an unsecured loan, which means that you don’t have to put up any collateral. If you were to take out a home equity loan or line of credit, you would need to use your house as collateral. This means the lender could foreclose on your home if you miss a payment, even if you were current on your other mortgage.
Of course, this doesn’t mean your lender couldn’t act if you fell behind on your HVAC loan payments. However, the odds that you lose your house or other possessions are much lower than if you took out a secured loan.
Other Benefits of Financing an HVAC Upgrade
It’s not uncommon for older units to be inefficient, which means that you’re likely spending more than you need to on repairs. Upgrading your HVAC system today with an HVAC loan means that you can start saving money on your utility bills each month. The savings can be used to make payments toward the loan, which can help defray the total cost of your investment.
Upgrading an existing HVAC system may allow you to finish a basement, attic, or other space within your home. This may increase the property’s square footage or otherwise make it easier to list at a higher price point. Even if you aren’t planning to sell in the near future, it still represents an almost immediate return on your investment.
You’ll Still Have a Warranty
Even if you finance your purchase, you’ll still have a warranty, which can protect your investment for years to come. You may also be able to buy a service package to ensure that your HVAC system is properly maintained during the payoff period.
If you need HVAC service in Gilbert, don’t hesitate to call the team at A/C & Plumbing Doctors today! We can also assist with plumbing projects such as drain cleaning, leak detection, or installing a new water heater. These can help keep your home comfortable and safe for years to come. Contact A/C & Plumbing Doctors today to schedule an appointment.
