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Personal Loans

AC Unit Financing Options

Updated Dec 05, 2023   |   11-min read

Depending on where you live, you might know how necessary a functional home cooling system is for comfort and air quality. If you ever plan to rent or sell your home, air conditioning can be critical to potential buyers and tenants. A modern, functional AC unit could boost your abode’s value.

Replacing an air conditioning unit or adding one to your HVAC system is no small undertaking. It can cost up to $20,000 to install a new central air conditioning system with ventilation if the home doesn’t have one.

We’ve put on our research cap to hunt different AC finance options so you don’t have to. We’ve also included the best personal loan lenders for excellent, good, fair, and thin credit. This guide will help you decide on a lender and select the type of AC unit financing that’s best for you. 

In this guide:


Compare multiple offers at no cost.

  • Get personalized quotes for home equity loans and HELOCs
  • No impact on your credit score

Personal loans for air conditioner financing

LenderBest forKey features
LightStreamExcellent creditFixed-rate loans starting at 5.99% APR with autopay and excellent credit

Funds available as soon as the same day

Minimum credit score of 660
SoFiGood creditFixed rates on personal loans starting at 8.99% with autopay

Unemployment protection available 

Minimum credit score of 680
UpgradeFair creditFixed rates beginning at 8.49% APR

Check rates without hurting your credit score

Minimum credit score of 580
UpstartThin creditFixed rates available starting at 6.7%

Considers employment and education in addition to credit score 

Minimum credit score of 300 

You have many options to finance the purchase of a new air conditioner, including a home equity loan or a credit card.

However, for many homeowners, the easiest option is a personal loan. Personal loans often have lower interest rates than credit cards and can be easier to qualify for than home equity loans. (They also don’t require borrowers to have equity in the home.)

Further, they have a simple application process, speedy funding times, and a range of repayment terms. Plus, many personal loans are unsecured, which means you don’t have to offer a valuable asset—such as your home or car—to serve as collateral. 

Using criteria such as rates, loan amounts, credit and financial requirements, and funding times, we’ve analyzed our data to compile a list. Based on our research, here’s a list of top personal loan lenders to help you find an AC loan that works best for you.

Best for excellent credit: LightStream

Editorial rating: 4.8 out of 5

  • Rate Beat program: Will beat a competitor’s offer by 0.10% APR if approved for a lower rate elsewhere
  • Unique satisfaction guarantee: Borrowers who are not satisfied with their loan experience can get a $100 refund
  • Loan amounts: $5,000 – $100,000

LightStream offers personal loans with a streamlined application process. And with personal loan amounts starting at $5,000 and repayment terms that begin at two years and can stretch out to 12 years, it makes for an easy lender for AC financing.

Lightstream also offers a robust 0.50% discount if you opt for autopay. Further, it doesn’t assess prepayment penalties, so if you pay off your loan early, you can enjoy saving on the interest fees.

LightStream offers competitive rates, no fees—including no origination fees, which is harder to come by—and a program that will beat any competitor’s rate if the borrower meets certain conditions. LightStream is a terrific option for borrowers who have excellent or good credit.

  • Credit score category: Excellent, good (660+)
  • Soft credit pull to check rates? Not available
  • Deposit time: As soon as the same day
  • Origination fee: 0%
  • Late fee: None
  • Rates (APR): 7.99%25.99%
  • Discounts: 0.50% interest rate reduction for enrolling in autopay
  • Repayment terms: 24 – 144 months, depending on the loan purpose

Best for fair credit: Upgrade

Editorial rating: 4.9 out of 5

  • Credit health tool to monitor your credit score and get personalized recommendations
  • Loan amounts: $1,000 – $50,000
  • 15-day grace period before late fee is assessed

Upgrade is a solid option for borrowers with bad or fair credit looking for HVAC financing. If you need a loan for an AC unit or system in the lower range, Upgrade provides loans of as little as $1,000. Plus, you can check your rates and loan amounts without a credit check. 

You can likely expect a higher interest rate if your credit score is less than stellar, but Upgrade won’t ding you with a prepayment penalty if you pay off your loan early. Plus, it offers a 15-day grace period before the late fee kicks in.

Beyond personal loans, Upgrade offers free credit monitoring and online educational tools. Once you accept your loan offer, you could receive loan proceeds the next day.

  • Credit score category: Fair, bad
  • Soft credit pull to check rates? Yes
  • Deposit time: As soon as the next day
  • Origination fee: 1.85% – 9.99%
  • Late fee: $10
  • Rates (APR): 8.49%35.97%
  • Repayment terms: 24 – 84 months

>> Read more: Best home improvement loans

Best for good credit: SoFi

Powered by Credible

Editorial rating: 5 out of 5

  • Unemployment protection allows pausing loan payments in case of job loss
  • Fast, easy application: Get a decision in minutes
  • Loan amounts: $5,000 – $100,000 

SoFi is our top choice for borrowers with good credit who are shopping for AC unit financing. With loan amounts that start on the low end and competitive interest rates, you can lower your rate further if you sign up for autopay, which offers a 0.25% discount.

SoFi also allows you to check your rates without a hard credit inquiry, so it won’t harm your credit. In addition to flexible repayment terms and speedy processing, SoFi offers unemployment protection. So should you find yourself out of a job, SoFi will give you flexible repayment terms to put off the pressure of paying off your loan—and help you with job placement.

  • Credit score category: Good 
  • Soft credit pull to check rates? Yes
  • Deposit time: As soon as the next day
  • Origination fee: 0% to 6%
  • Late fee: None
  • Rates (APR): 8.99% – 23.43% with autopay
  • Repayment terms: 24 months – 84 months

Best for thin credit: Upstart

Editorial rating: 4.8 out of 5

  • Uses artificial intelligence to provide competitive rates based on unique creditworthiness
  • Checking your rate won’t affect your credit score
  • Loan amounts: $1,000 – $50,000

Upstart is an excellent option for borrowers who are new to credit. Its minimum credit score is 300 (the lowest score possible). Upstart will pull from nonconventional lending criteria, such as your employment and education, to approve loans.

Upstart also features a streamlined application process, borrowing amounts starting at $1,000, and next-day financing. Plus, you can check your rates and terms without a hard credit pull to comparison shop without hurting your credit.

  • Credit score category: Thin, bad 
  • Soft credit pull to check rates? Yes
  • Deposit time: As soon as the next day 
  • Origination fee: 0% – 10%
  • Late fee: 5% of the monthly payment amount or $15, whichever is greater
  • Rates (APR): 6.7% – 35.99
  • Repayment terms: 36 or 60 months

Other options for air conditioner financing

The best way to pay for a new air conditioner is to plan a budget and fund it with your personal savings. Most financial experts recommend budgeting 1% to 2% of your home’s purchase price for maintenance and repairs to avoid spending hours hunting for an online lender. Plus, you won’t have to go through the loan application process or pay interest.

But borrowing doesn’t have to be an unfavorable option as long as you can keep up with monthly payments. If a personal loan isn’t the best option for financing your AC unit—maybe you’re unable to qualify for a low rate—consider these other ways to cover the cost: 

Type of fundingFeaturesBest for
Home equity loanLower interest rates
Fixed interest rates
Single lump sum upfront

Interest might be tax-deductible 
Homeowners comfortable offering their home as collateral and who have a specific intended use for the loan 
Home equity line of credit (HELOC)Tap into the credit line as long as you repay during the draw period

Flexible use

Interest rates might be lower than personal loans
Homeowners who prefer to tap into only what they need or are unsure of the total amount needed
Federal grant for low-income householdsIf you meet the income and other eligibility requirements, get a free or discounted upgrade to your AC unitBorrowers who qualify and struggle to pay their home cooling bills due to income
Company financingConvenient

Borrow the exact amount you need
Borrowers with various credit scores who prefer unsecured loans 
Credit cardUse a credit card you already have

Might qualify for a zero-interest period or signup bonus

Credit card perks and rewards 
Borrowers who can pay the balance fast and take advantage of signup bonuses or who have excellent credit and qualify for a 0% APR period  

Home equity loans

Home equity loans let you borrow against the equity you’ve built in your house. You can find these loans from local banks, credit unions, financial technology platforms, or online lenders specializing in mortgage or home equity loans.

As with any financial product, we urge considering the pros and cons before you proceed.


  • Potentially lower interest rate than other financing options because your home secures the loan.

  • Fixed interest rates, which mean the same monthly payment.

  • Single lump sum upfront. 

  • If you use it to upgrade your home, you may be able to deduct interest payments on your taxes.


  • Risk losing your house if you can’t keep up with payments.

  • You often need to have built equity (i.e., paid down your mortgage) to qualify, around 10% to 20%.

  • You may need to pay upfront costs for a home equity loan, such as the cost of an appraisal and origination fees.

  • Approval decisions are often slower than for personal loans.

>>Read more: Are home equity loans tax-deductible?

Home equity lines of credit (HELOC)

A home equity line of credit also taps into your home equity. 

HELOCs are similar to credit cards. You can use funds as needed, repay as you borrow, and borrow more money up to your credit limit during the draw period. This flexibility can be a substantial benefit if you’re doing ongoing AC repairs or other home improvement work. 


  • Interest rates may be lower than for personal loans.

  • Interest payments may be tax-deductible.

  • Borrow and repay as often as you like during the draw period. 


  • Your house is on the line if you can’t repay what you borrow.

  • You can’t get a HELOC if you haven’t built home equity.

  • Appraisal expenses and additional fees may equate to higher upfront costs.

  • Most have variable interest rates, so your monthly costs could change over time.

  • The application, approval, and borrowing process can be slow, as with home equity loans.

Federal grants for low-income households

The Low Income Home Energy Assistance Program (LIHEAP), a program under the U.S. Department of Health and Human Services, provides grants to help low-income families with home energy costs.

Some states let you tap into the grant to fix broken or inefficient heating or AC systems. Your state may also offer a similar state-based energy assistance or energy efficiency funding program, so check your state government website for other options.


  • No need to repay the money.

  • You may qualify for the program if a household member receives benefits from another government program for low-income folks. 

  • Can qualify for a grant to fix an old, broken, or inefficient AC unit. 


  • Only low-income households qualify.

  • Programs differ by state, which can be confusing. 

  • Households with the most considerable energy needs get the most assistance. 

Finance through an HVAC company

Some HVAC companies offer air conditioning financing for customers, often in the form of an installment loan similar to the personal loans we covered. The company may connect you with a partner lender or collect payments over time.

Company financing can be convenient, but be sure to compare the interest rates the HVAC company offers with other AC loan options to avoid an inflated rate from the company. 


  • Convenience—only work with one company.

  • You should be able to borrow the exact amount needed.

  • No hefty upfront costs. 


  • The rates might be higher than for a personal loan from a bank, credit union, or online lender.

  • You might have fewer options and available financing plans.

  • Only use proceeds on a home heating or cooling system. 

Credit cards

If your AC unit only needs minor work—for instance, recharging the refrigerant or cleaning the compressor—you might want to consider using a credit card to cover the costs.

Most credit cards come with much higher interest rates than loans or equity lines of credit, so credit card debt could cost you more if you carry a balance.

On the other hand, a credit card could be wise if you’ve just signed up and must meet minimum spending requirements for a bonus, or the card comes with an introductory 0% APR. Just plan to pay off the balance before the introductory APR ends to avoid paying a fortune in interest. 


  • Pay no interest if you pay off the balance of an introductory 0% APR period.

  • You may not need to take out a new credit card.

  • You could enjoy a signup introductory bonus. 


  • Interest rates can be high if you don’t pay off the balance during the introductory period.

  • It may increase your credit utilization ratio, which could hurt your credit score.

  • You might spend more than you anticipated, racking up more significant debt. 


How much does repairing or replacing an AC unit cost?

The costs to repair or replace an air conditioner can vary and depend on your location and needed repairs. 

Here’s a rough estimate of what typical work could cost, according to HomeGuide:

  • Replace fan motor: $200 to $700
  • Recharge refrigerant: $100 to $600
  • Replace drain pan: $200 to $600
  • Flush drain line: $75 to $250

If you need to replace your entire AC unit, it will cost anywhere from $2,500, to $7,500, according to HomeGuide. Check to see which parts need repair and whether it makes financial sense to replace or repair specific parts versus replacing your entire unit. 

Installing a brand-new central AC system in a home without one can run as high as $20,000. You can get quotes from AC contractors in your area to get a clearer idea of the cost before committing or looking into financing. 

Can I get air conditioning financing with bad credit?

It’s possible to get air conditioning financing with bad credit. However, expect to pay higher interest rates. Your chances of landing a loan or line of credit might increase if you own your home and can access home equity with a HELOC or home equity loan.

You can also check out financing options from bad-credit lenders with more flexible credit requirements.

How much more expensive will my air conditioner be with financing vs. cash?

It depends on your location and air conditioning unit or system type, loan amount, and interest rate. Higher interest rates, larger loan amounts, and more complex air conditioning installments will be more expensive. 

For example, let’s say the cost to replace an AC unit will cost you $5,000. Using a personal loan calculator, if you replace the air conditioner with outright cash, the total cost is $5,000. 

But taking out a personal loan with a 15% APR with a five-year repayment will cost $7,137—$2,137 in interest fees.

Are there financial benefits for improving my home with a new HVAC?

Updating your AC unit with a new, more energy-efficient one can save you money on energy bills during the warmer months. Plus, a modern, functional AC system in your home is attractive to potential homebuyers, so it can increase your property value.

You could get a tax deduction if you’re tapping into a home equity loan or HELOC for your AC unit financing needs. 

Recap of AC unit personal loans

LenderLoan amountsMinimum credit score
LightStream$5,000 – $100,000660
Upgrade$1,000 – $50,000580
SoFi$5,000 – $100,000680
Upstart$1,000 – $50,000300