Solar panels help save on energy and are a green solution for your house or vacation home. There are financing options available if you are short of cash and have bad or average credit, including loans by peer to peer lending networks and banks, secured lines of credit, and others.
There are lending services that offer financing for solar panels and other green solutions and serve customers with different credit profiles. While your score is one factor that lenders look into, they are also interested in your debt to income ratio, employment status and history, and so on. This means that your score is a factor that lending services consider but it is not the major one. Some providers even offer loans with no down payment and no credit score requirements. With other lenders, interest is tax deductible which saves you a lot of money. Another option is to apply with a major bank, credit union, or your local bank. Many financial institutions in Canada offer secured loans and LOCs to borrowers with a less than perfect score and require some valuable asset to guarantee prompt repayment. This can be any asset of value, for example, collectibles and jewelry, vehicle, tools of trade, etc. There are other options to look into, including power purchase agreements, home equity lines of credit, and others. A power purchase agreement is a form of contract to purchase electricity which sets the terms and conditions, i.e. performance terms, pricing, and delivery point. A home equity line of credit is another option to gain access to affordable financing if you are a homeowner. Financial institutions are more willing to extend secured LOCs because your home equity serves as a guarantee. This means that they have the right to seize your property if you are unable to repay the outstanding balance. Unsecured lines of credit are usually extended to customers with stellar and very good scores and those with long and established payment histories.
Solar panels cost a lot of money (up to $60,000), which makes financing a costly endeavor. One option is to join a solar power program and make money by selling energy. The energy produced by your solar panels goes to the main power grid. This is a form of solar lease which has pros and cons. On the downside, it may affect your home’s resale price, and there are bureaucratic issues to deal with. The good news is that provincial governments offer significant subsidies to maintain and install solar panels. In addition to money-saver programs, there are other financing options to consider – cash in your savings account, a loan by friends or family, your credit card, and peer to peer lending networks. You can use your credit card to make a down payment or pay the full amount, depending on your credit limit. This is a good idea only if you use a credit card with a low rate and a long grace period. Peer to peer lenders are also willing to extend loans to borrowers with less than perfect scores based on factors such as income level, type of employment, loan purpose and amount, and others. If you have enough cash in your account, this is the least expensive option to purchase and install solar panels.