There are loans for solar panels and the installation of these panels. You can get an unsecured personal loan, home equity financing, or cash-out refinancing to have solar panels installed in your home.
If you want to reduce your utility bills and are looking for ways to help the environment solar panels may be a good option for you.
The average cost for solar panels complete with installation is between $15,000 and $25,000. It will take between 6 to 9 years to make up the cost.
An unsecured personal loan has a fixed interest rate and can be taken out for two to seven years. This is a good way to pay for solar panel installation.
A home equity loan or a line of credit can also be used for the solar panel job. There are some tax credits to help you get some of your money back at tax time. Some lenders offer financing options.
The Lightstream company offers solar loans. They require that the borrower have a credit rating of at least 660. The interest rates will vary between 5.38 and 20.5 percent based on the credit score.
The upgrade is another solar lender. They have higher interest rates. They begin at 7.99 percent and range up to 35.9 percent. They do allow people with lower credit scores to apply for the loan. A person needs a credit score of 600 to be approved for a solar loan.
Sofi offers loan loans and their interest rates are between 5.99 and 21.2 percent. You will need to have a credit score of 680 to be approved for this loan.
The Lending Club offers these loans at interest rates between 10.6 and 35.8 percent. They will accept credit scores as low as 600.
These lenders can give you loan amounts for as low as $1,000 to $100,000 for your solar panel installation project.
Things to Look for in an Unsecured Solar Loan
These loans have shorter payments that will allow you to pay the loan off faster. You may need to make smaller payments on a home equity loan for the next 10 to 20 years.
Annual Percentage Rate
This is the total cost of the loan including any interest and fees. The interest rates from 6 percent. People with good credit will get lower rates. When looking at a loan be sure to compare the APR.
Some lenders will charge a fee for the loan that is between 1 and 6 percent. This is an origination fee and is money the lender will keep.
This is the amount you are going to repay and your monthly payments.
You can go online and look at loans. They will run a soft credit check which will not hurt your credit score.
Solar Panel and Tax Benefits
For the 2021 tax season, the government will give a 22 percent tax credit. For example, if you spend $20,000 on solar panels you would get a credit of $2,500. You will get the benefits as long as you own the solar panels. You may be able to carry this amount into the next tax year.
Other Soar Panel Loans
There are other ways to pay for home solar panels.
Home Equity Loans
You will need to put up your home as collateral but you can have a longer repayment and lower interest rates.
Home Equity Line of Credit
This is a lower interest method and you can draw funds as needed for this project.
You can take out a new mortgage and add the costs. You will still need to pay between 2 and 5 percent in closing costs.
Leasing or Power Purchase Agreement
You will not be able to take a tax credit but you will not have to put out money upfront. The owner of the panels will get the rebates and you will rent them.
Solar Panels and What to Look For
You need to look at how you will save and how much value will be added to your home. If you live in an area with plenty of sun you may see the benefits.