AC Unit Financing: What Are Your Options?

In most parts of the country, a functional cooling system is necessary for home comfort and air quality. Air conditioning is a key feature buyers and potential tenants look for, so a functional AC unit could also increase your property’s value. 

Unfortunately, replacing an air conditioning unit or adding one to your HVAC system is no small task. Having a new air conditioner installed generally costs from $3,350 to $5,912, according to Home Guide. 

Because the costs are high, many homeowners turn to AC loans to pay for a new system. This guide will help you pick a lender and choose the type of AC unit financing that’s right for you. 

In this guide:

• The best AC loans
• Other methods of air conditioner financing
• Frequently asked questions

Best loans for air conditioner financing

There are many ways to finance the purchase of a new air conditioner, including using a home equity loan or a credit card. For many homeowners, however, the easiest option is a personal loan.

Personal loans tend to have lower interest rates than credit cards and can be faster and easier to qualify for than home equity loans. We rated the best personal loan lenders based on borrower credit categories. Our ratings can help you to find the AC loan that works best for you.

• If you have good credit
• If you have fair credit
• If you have bad credit

AC loans for good credit

Good credit is generally defined as a credit score of around 680 or higher. While minimum credit scores and terms vary by lender, each of these lenders generally offers personal loans at competitive rates to creditworthy borrowers. 

LightStream

LightStream offers personal loans with a streamlined application process. It is a division of SunTrust Bank, an FDIC-insured financial institution.

Lender info

• LendEDU rating: 5.00 / 5.00
• Minimum credit score: lightstream-perl-43-mincreditscore
• Loan amount: lightstream-perl-43-amountlow – lightstream-perl-43-amounthigh
• Loan terms: lightstream-perl-43-termlengthrange_m
• APRs: lightstream-perl-43-fixlow – lightstream-perl-43-fixhigh fixed
• Full review: LightStream Personal Loans Review

SoFi

SoFi is especially well known for student loan refinancing; but it also offers personal loans you can use for AC financing, as well as other financial products. Members who borrow from SoFi get perks including career counseling and discounts for multiple loans. 

Lender info

• LendEDU rating: 4.87 / 5.00
• Minimum credit score: sofi-perl-36-mincreditscore
• Loan amount: sofi-perl-36-amountlow – sofi-perl-36-amounthigh
• Loan terms: sofi-perl-36-termlengthrange_y
• APRs: sofi-perl-36-fixlow – sofi-perl-36-fixhigh fixed; sofi-perl-36-varlow – sofi-perl-36-varhigh variable
• Full review: SoFi Personal Loans Review

PNC 

PNC Bank offers both secured and unsecured loans, but most people looking for an AC loan would prefer unsecured, which means you don’t need to put any collateral on the line.  

Lender info

• LendEDU rating: 4.75 / 5.00
• Minimum credit score: Not disclosed
• Loan amount: pnc-perl-1142-amountlow – pnc-perl-1142-amounthigh
• Loan terms: pnc-perl-1142-termlengthrange_m
• APRs: pnc-perl-1142-fixlow – pnc-perl-1142-allhigh fixed
• Full review: PNC Personal Loans Review

Air conditioning financing for fair credit

Fair credit is generally defined as having a credit score between 620 and 670, though lender requirements for a fair credit loan can vary. Be prepared for a higher interest rate the lower your credit score.

Marcus

Marcus is the online consumer banking arm of Goldman Sachs. It can provide your AC loan, as well as other financial products including an online bank account. 

Lender info

• LendEDU rating: 5.00 / 5.00
•  Minimum credit score: marcus-perl-56-mincreditscore
• Loan amount: marcus-perl-56-amountlow – marcus-perl-56-amounthigh
• Loan terms: marcus-perl-56-termlengthrange_m 
• APRs: marcus-perl-56-fixlow – marcus-perl-56-fixhigh fixed
• Full review: Marcus Personal Loans Review

FreedomPlus

FreedomPlus offers loans to borrowers with fair credit as well as to borrowers with poor credit, who are considered subprime borrowers. You can use personal loans from FreedomPlus for air conditioning costs or other expenses. 

Lender info

• LendEDU rating: 4.38 / 5.00
•  Minimum credit score: Not disclosed
• Loan amount: freedomplus-perl-53-amountlow – freedomplus-perl-53-amounthigh
• Loan terms: freedomplus-perl-53-termlengthrange_y 
• APRs: freedomplus-perl-53-fixlow – freedomplus-perl-53-fixhigh fixed
• Full review: FreedomPlus Personal Loans Review

Air conditioning financing for bad credit

Finding a loan with bad credit is difficult and likely to be costlier. However, you have some options for air conditioning financing with bad credit, including personal loans with lower credit requirements. 

OneMain Financial

OneMain Financial has made loans to an estimated 15 million customers. You can use these personal loans for any purpose, including HVAC financing with bad credit. 

 Lender info

• LendEDU rating: 5.00 / 5.00
•  Minimum credit score: Not disclosed
• Loan amount: onemainfinancial-perl-51-amountlow – onemainfinancial-perl-51-amounthigh
• Loan terms: onemainfinancial-perl-51-termlengthrange_m 
• APRs: onemainfinancial-perl-51-fixlow – onemainfinancial-perl-51-fixhigh fixed
• Full review: OneMain Financial Personal Loans Review

Other methods of air conditioner financing

The best way to pay for a new air conditioner is to plan a budget ahead of time and use personal savings. This lets you avoid finding a lender, the loan application process, and paying interest.

Borrowing doesn’t have to be a bad option, though, as long as you can afford to keep up with monthly payments. If a personal loan isn’t the best route for financing your AC unit—maybe because you’re unable to qualify for a good rate—consider these other ways to cover the cost.

• Home equity loans
• Home equity lines of credit (HELOC)
• Federal grants for low-income households
• Company financing
• Credit cards

Home equity loans

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

Home equity lines of credit (HELOC)

A home equity line of credit also taps into your home equity, but you get access to a line of credit you can use as needed, instead of a fixed loan amount.

HELOCs function much like credit cards. You can use funds as needed, repay as you borrow, and borrow more money up to your credit limit over time. This flexibility can be a big benefit if you’re doing ongoing AC repairs or other home improvement work. 

Federal grants for low-income households

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

Some states let you use 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.

Company financing

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

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

Credit cards

If your AC unit only needs minor work, such as recharging the refrigerant or cleaning the compressor, you may only need to borrow a few hundred dollars.

This is below the minimum amount for many personal loans, so using a credit card could help you avoid excess debt or going through all of the paperwork that comes with a home equity loan for such a small amount.

However, credit cards typically come with much higher interest rates than loans or equity lines of credit, so this debt could cost you more if you carry a balance. It could also hurt your credit score if your AC financing pushes your credit utilization ratio too high.

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

Frequently asked questions