Are you keen to install solar panels, a battery or even a heat pump hot water system but are not sure if you can afford it at the moment? Have you considered borrowing funds to finance those carbon emission reduction acquisitions?
Purchasing and installing solar panels on your rooftop is an excellent investment with a potential return up to 12% due to electricity bill savings. Even if you borrow money to purchase your solar panels, at a competitive rate of interest, you can still get a positive return. This is because you can save more money on your power bills than it costs you for finance.
It can be daunting and mind-boggling to attempt to research all available credit options, make comparisons and obtain the best deal. The following advice and suggestions are provided to make the decision-making process easier.
Zero interest loans widely advertised by some installers are too good to be true. While you may not be charged any interest on money borrowed, you are likely to be charged 15-25% more than the market rate for the solar system components they sell you. This is probably the worst financial route to pursue and should be avoided.
If you have a mortgage offset facility or the ability to redraw funds from your mortgage, this is probably the simplest and most cost effective method of financing solar installations or energy efficient electrical appliances and home renovations. You simply pay the same interest rate as your home mortgage, or in some cases, even less. Your power bill savings can then be applied to reduce your mortgage balance. Contact your mortgage institution to see if this option is available for you.
If you don’t have a mortgage, or it is too difficult to renegotiate your existing mortgage, then a personal loan can be a viable and competitive option.
The standard general personal loan facility, historically promoted by banks and other financial institutions, will lend you money for anything but will apply an interest rate somewhere in the range of 16% to 20%. This is not the type of personal loan you want.
Recently many financial institutions have established ‘green’ or ‘sustainability’ personal loan options. These loans are offered to specifically fund purchasing of solar panels, electric vehicle chargers, batteries and other home energy efficiency measures such as insulation and heat pumps.
However, the label ’green’ does not always mean you are being offered a competitive interest rate. The rates charged can vary widely with some similar to home mortgage rates while others can range up to a prohibitive 20%. These loans can be for one to ten years in duration and are likely to have application fees as well.
The emergence of ethical finance brokers, who specialize in ‘green‘ credit, has made the task of finding the best personal loan more accessible and manageable. The following ‘green’ finance brokers are popular and attract positive reviews from clients.
The authoritative Solarquotes organisation has partnered with finance company Smart Me. If you go to solarquotes.smartme.com.au you will be put in contact with certified solar finance experts who will scan the full range of banks and other financial lenders to get the best available credit option for your circumstances.
All the local solar installers that are posted on the Electrify Bouddi website refer customers requiring credit to one specific finance broker – Parker Lane. Parker Lane is a broker for all types of loans but has established a specific green loan expert capability. It is currently advertising green personal loans for 5.99% (comparison rate up to 7.25%) for eligible homeowner applicants. You can get a fast quote for solar installations at parkerlane.com.au.
If you do make the decision to seek and obtain finance for your solar system or energy efficient appliances, please let us know details of your experience so we can continue to enhance the quality of our advice. Email us on info@electrifybouddi.org
