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Residential Heating, Ventilating, and Air Conditioning (HVAC) financing programs offer affordable monthly payments that make it easier to purchase and install replacement systems.

Paying cash upfront is the most cost-effective way to keep cool in the summer, warm during the winter, and enjoy hot showers any time of year. However, most homeowners do not have enough resources on hand.

Home improvement loans and provider payment plans are the first place to turn. These installment plans lead to ownership of the machinery once you satisfy the contract terms.

Rent to own agreements should be a last resort alternative because the lease expenses can go on indefinitely. However, people with bad credit can often qualify without a credit check.

HVAC Loans & Payment Plans

Home improvement loans and provider-sponsored payment plans are the primary financing option for most residential HVAC replacement systems. These alternatives work better for homeowners because installment contracts have a fixed end date. Therefore, you own the equipment outright once you make the final installment.

Financing Options

Homeowners have several options to finance the purchase and installation of their HVAC systems with an installment contract. Installment plans feature fixed monthly payments and a defined end. Each alternative has unique pros and cons. Select the choice that suits your needs best.


Request an unsecured personal loan here (Affiliate Link) if you do not have enough equity in your home. Lenders rely on your signature promise to pay. Therefore, having sufficient income, verifiable employment, good credit score, and a checking account is essential.

If approved, the lender will deposit money directly into your checking account. Funding that you control gives you the freedom to shop around and choose the contractor with the best deal and service reputation.

If you default in the future, the lender cannot repossess your home or HVAC equipment. However, they can file a lawsuit to garnish wages or attach a lien against your personal property.


Secured home improvement loans work best for people with significant equity in their house. Typically, the loan to value ratio (LTV) on your existing mortgage needs to be at 60% or lower. Otherwise, you may not have sufficient equity to finance HVAC systems this way.

LTV = Mortgage Balance/ Real Estate Value

  • Home equity loans act is a second mortgage with fixed installments
  • Home equity line of credit (HELOC) is a revolving contract with variable amounts due monthly
  • Cash-out refinancing results in a brand new mortgage with fixed monthly obligations

If you default on a loan secured by your real estate, the lender has the right to foreclose on your property. Keep this consequence in mind. Nobody wants to wind up homeless.

Payment Plans

Third-party finance companies typically back payment plans offered by local HVAC contractors and may be secured, unsecured, installment, or revolving. Read the contract language carefully before choosing to pay for your air conditioner, furnace, or water heater with a retailer-sponsored arrangement.

  • A secured payment plan allows the lender to remove your machinery in the event of default
  • Credit cards are revolving contracts that can take a long time to retire when making the minimum disbursement, allowing significant interest charges to accrue
  • Longer-term installment contracts have lower monthly obligations but allow more time for interest charges to add to your debt

Also, keep in mind that the finance company backing the payment plan sends the money to the contractor or retailer – not you, the homeowner. This arrangement can limit your choices to a single provider.

Bad Credit

Financing air conditioning and other HVAC systems with bad credit require some creativity and sacrifice. Lenders shy away from approving consumers with an adverse history appearing on their consumer reports.

People with bad credit history can try some of these approaches to improve their chances of finding a partner willing to approve their request.

  • Online companies often employ less stringent criteria and approve borrowers with weak credentials more frequently – when compared to brick and mortar banks and credit unions.
  • Lead consolidators (Disclosure: the affiliate partner on this site fits into this category) captures the borrowing credentials of interested consumers and markets the profile to a broad network of lenders who bid on the opportunity to present offers. Volume increases approval odds.
  • Rent to buy companies often approve consumers with meager borrowing credentials more readily because the initial payments often continue indefinitely (see next section).
  • No credit check companies use data from alternative bureaus that collect non-traditional financial information and focus more on affordability (see directly below).

No Credit Check

Financing HVAC replacement systems without a credit check appeals to people with low credit scores as well as those with no borrowing history on their consumer reports. However, this alternative works differently than most people assume and requires the applicant to shine in other areas (income and employment).

No credit check lenders usually pull a report from a bureau not named Equifax, Experian, or TransUnion and may consider a score from a company not called FICO or Vantage. The alternative bureau may collect data about rental, utility, and cell phone companies and other non-traditional information. A hard inquiry appears on the file of the second-tier reporting agency but does not impact your score at Equifax, Experian, or TransUnion.

Income and affordability must balance out your application if you are borrowing money without a traditional credit check. Balance means that your projected debt-to-income ratio must fall within acceptable ranges. Also, you must provide the details needed to verify employment.

Rent to Own Contracts

Rent to own contracts are a secondary financing option for residential HVAC replacement systems. This alternative is second in line because the long-term costs run much higher when the agreement renews multiple times without a purchase. In other words, the lease payments often never end.

However, people with inadequate borrowing credentials often find it easier to qualify without a credit check. Learn about the pros and cons as they apply to air conditioning, furnaces, and water heaters.

Pros and Cons

Rent to own means that the homeowner leases the equipment and has an option to buy at some time during the term of the agreement. Also, the lessee can choose not to renew the lease at the end of the contract but must forfeit the units.

This financing alternative does have advantages.

  • Lower initial monthly payments to rent the machinery
  • Bundle installation costs into the rental fee
  • Worry-free service contracts avoid surprise repair bills
  • Benefit from energy savings, tax credits, and manufacturer rebates
  • Transferrable to the next homeowner should you sell the property

The big drawback comes at the end of the lease term when you must choose between losing your HVAC systems or renewing the agreement and locking yourself into another round of rental charges and over-price supplies. In other words, many pay the inflated monthly payments indefinitely and never own the equipment.

  • Rental fees are higher because somebody (think homeowner) must pay for the installation and possible removal costs for permanent units. These transfer expenses require skilled technicians and the transport of heavy, bulky equipment.
  • Rental charges can go on indefinitely unless you can come up with a lump sum balloon payment at some point to complete the purchase. Constantly renewing the lease without buying the equipment is more expensive over time.
  • Non-renewal means a big sacrifice in comfort (taking cold showers, shivering in a frigid house during the winter, and sweating in broiling temperatures during the summer).

Air Conditioning

Rent to own portable air conditioning units that rest on a windowsill is more cost-effective than central systems that connect to the ductwork in your home. The reasons should be clear when you factor in the option to terminate the contract and return the unit to the finance company.

  • Pulling a portable AC unit from your window and returning it to the retailer is relatively simple and involves modest shipping costs.
  • Installing, inspecting, and then removing a central air conditioning system requires complex servicing from a local licensed contractor who can transport heavy equipment to and from your home.

Therefore, expect to pay a premium for a permanent AC system, which may include a large buyout amount in the legal language. Make sure to read the contract carefully and compare all of the financing costs.

Furnaces & Water Heaters

Rent to own furnaces and water heaters can also prove problematic for the same reason. The relatively expensive and involved installation process raises the monthly leasing fee and buyout figure. These arrangements can lock homeowners into perpetual contract renewals – unless they can scrounge up a large enough sum to complete the purchase.

The alternative to renewing the lease is not very appealing. Space heaters work well for single rooms but could leave you shivering during long-cold winter nights. Likewise, portable water heaters cannot serve a large family averse to taking cold showers, unless you are prepping a hot tub.