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Personal Loans

AC Unit Financing Options

You don’t have to live in Phoenix for an HVAC to be a top priority. Knowing this, the only real issue you may have is determining how you will pay for it. Installing AC in most homes requires a new HVAC system, which, depending on where you live, can cost $5,000 to $15,000

If you need to purchase a new HVAC system, securing AC unit financing is the first step after researching what you need. This guide shares whether this can be done (hint: it can be), which lenders we think are the best, and other options you may have to pay for a new heating and cooling system. 

Can you finance a new HVAC system? 

Yes, you can finance a new HVAC system. You have more options to finance an HVAC system than you may realize. The most popular options are personal loans or HELOCs. Interest rates are lower than other financial products, and borrowing amounts are often higher than credit cards. 

Personal loans are usually unsecured, so you don’t have to provide collateral to secure the loan. Because of this, one thing to remember is that the interest rate will likely be higher than it would be with a HELOC. However, the application process and funding time are faster than with HELOCs.

Secured personal loans are also an option. Collateralize a high-value asset, and you may receive a lower interest rate. The downside to this is that if you miss too many payments and go into default, the lender may seize your asset in place of payment. Assets that can be used as collateral include:

  • Savings accounts
  • Investment accounts
  • Jewelry
  • Art
  • Automobiles
  • Real Estate 

HELOCs, on the other hand, are already secured using your home equity. When you apply for a HELOC, the lender will likely send out an appraiser to determine the value of your home. While everything should be done promptly, the process takes longer than a personal loan. 

Best options for new AC unit financing 

The best options for purchasing a new AC unit is usually either a personal loan used as a home improvement loan or a HELOC. However, lenders are not created equally. 

We like the following lenders because they have lower interest rates than their competitors and the application process is an overall smoother, faster experience.

LenderProductRates (APR)
FigureHELOC8.35%16.55% fixed
CrediblePersonal loan marketplace7.49%35.99% fixed
LightStreamPersonal loan7.49% – 25.49% fixed
SoFiPersonal loan8.99% – 29.99% fixed
UpgradePersonal loan8.49% – 35.99%

Figure: Best HELOC for financing AC unit

LendEDU rating: 4.9 out of 5

  • You must draw 100% of funds at the line of credit origination, with the ability to redraw as you pay off the balance
  • Use of AI and blockchain makes approval and funding fast
  • Fixed rates (unique from many HELOC lenders)

Figure is a digital-first lender that streamlines the HELOC approval and funding phases with artificial intelligence and blockchain technology. You’ll appreciate the expedited process, which contrasts with the lengthy timelines associated with traditional lenders.

Figure requires borrowers to draw 100% of the funds at the time of credit origination. But as you repay your balance, you can redraw funds. 

Because of this feature, we think a Figure HELOC is best for homeowners looking to finance significant purchases or projects, including installing a new air conditioning system, and who may have ongoing or future financing needs.

Borrowers also report a seamless and user-friendly experience, from application to funding, and helpful customer support. This blend makes Figure an excellent choice for homeowners seeking to invest in their comfort with a new AC unit without the hassle of traditional lending processes.

Credible: Best personal loan marketplace

LendEDU rating: 5 out of 5

  • Marketplace includes a diverse range of lenders
  • No hidden fees or costs throughout prequalification and loan comparison process
  • See prequalified rates based on your credit profile

As a leading online loan marketplace, Credible offers borrowers a platform to compare prequalified personalized loan offers from multiple lenders. This approach saves time and ensures borrowers can find the most competitive rates and terms without lowering their credit score.

The platform’s user-friendly interface and transparent comparison tools make it easy for homeowners to navigate financing options. With Credible, applicants can prequalify for multiple loan offers by completing a single application. 

This is advantageous if you’re looking to finance an AC unit because you can assess your options and make informed decisions without the hassle of rate shopping with individual lenders.

LightStream: Best personal loan for excellent credit

LendEDU 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
  • Borrowers 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. 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 save on interest fees.

LightStream offers competitive rates, no origination fees, and a program that will beat any competitor’s rate if the borrower meets certain conditions. 

Because LightStream doesn’t allow borrowers to prequalify with a soft credit check—which doesn’t affect your credit—it’s best for those confident they’ll be approved for the lowest rates due to their excellent credit.

SoFi: Best personal loan for good credit

LendEDU rating: 5.0 out of 5

  • Easy application gets decisions in minutes
  • No fees required
  • Loan amounts: $5,000 – $100,000

SoFi is our top choice for borrowers with good credit 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. It also offers member benefits, such as unemployment protection and financial advising.

Upgrade: Best personal loan for fair credit

LendEDU 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 assess 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 get loan proceeds the next day.

Other options for financing your AC unit 

Getting a personal loan to cover the cost of a new AC unit isn’t your only option. You may also want to consider pursuing federal grants, specialized credit cards, peer-to-peer lenders, and HVAC companies that offer financing themselves. 

Each option, however, has its share of drawbacks you’ll want to consider before deciding.   

Federal grant

The United States government offers grants to help with heating and cooling. For example, the Weatherization Assistance Program helps cover the costs of weatherizing a home and replacing boilers, furnaces, and air conditioners. Applicants must meet eligibility requirements, and money is limited. 

This is a highly competitive option because the money from a federal grant does not have to be repaid; there is only a set amount each year nationwide. Of course, there is no harm in trying, but you’ll want to have a backup plan in case your application is denied. 


  • Money does not need to be repaid


  • Grants are highly competitive

  • Must meet eligibility requirements

  • Application processing time can take longer than other methods

Credit cards

Depending on the cost of purchasing your new AC unit, using a credit card to pay for the expense may be a good option. The best option would be to use a card with a 0% intro APR—because some cards offer 0% for over a year. 

The catch is that you need a strong credit score to qualify, and the card credit limit may not be enough to cover the entire cost. If you don’t pay off the balance within the intro APR period, the interest rate will likely jump to somewhere between the high and low thirties. 


  • Make minimum payments during the intro period for 0% intro APR cards

  • Don’t need collateral to secure the card


  • Need a strong credit score to qualify

  • Credit limit may not be enough to cover the entire AC unit cost

  • Higher interest rate than personal loans

Retail financing

Some HVAC companies offer financing options, meaning the company itself offers a loan, and you make monthly payments to them instead of to a lender. The biggest advantage to going this route is that it’s fast and easy, and you know you’ll get the exact amount you need for your AC unit. 

There are drawbacks to retail financing. The biggest is that there are often a lot of unnecessary fees, and the interest rate is likely to be higher than it would be with institutional lenders.


  • Fast and convenient

  • Loan amount is the exact amount needed


  • May have high interest rates

  • May have unnecessary fees

  • Still need to have a strong credit score to qualify

Peer-to-peer financing

Peer-to-peer (P2P) financing is similar to going to an online lender. You apply for a loan, and, if you’re approved, the money is deposited directly into your bank account. The eligibility requirements are often much easier to meet.

But the catch is that the interest rates are typically higher than other loan products and often a few fees are involved. For subprime borrowers, however, P2P loans can be one of the better options on the market.


  • Easier qualifications than other loan products

  • Fast processing time


  • May have higher interest rates

  • May have more fees than standard lenders

How to secure AC unit financing

If you take out a loan to purchase a new AC unit, know that the loan itself is a type of personal loan. Unlike a house or car loan, the loan is not secured by the item you purchase. Because personal loans are often unsecured, learning how to take one out shouldn’t take up too much of your time. 

If you have a fair amount of equity in your home, another option is to use a home equity line of credit (HELOC). HELOCs are similar to credit cards, but your home equity secures them. The money you can borrow is usually around 80% of your equity. If you have $100,000 in equity, you could potentially borrow up to $80,000. 

Like a credit card, you only pay interest on what you borrow with a HELOC. Once you pay it back, the money becomes available to borrow once again. Also, because it’s secured with a high-value asset, the interest rate is often considerably lower than other financial products.

One thing you want to consider is that applying for a HELOC can take more time than other methods because your home will need to be appraised. It may not be your best option if you’re in a time crunch.  

Recap of AC unit financing options

  • Best HELOC (4.9/5): Figure
  • Best personal loan marketplace (5/5): Credible
  • Best personal loan for excellent credit (4.8/5): LightStream
  • Best personal loan for good credit (5/5): SoFi
  • Best personal loan for fair credit (4.9/5): Upgrade