Select your Solar Loan ?
Looking into Solar loans? let’s find out what is available in the market now.
The solar loan is one of the most popular and most demanded solar product right now. A lot of smaller companies don’t have the credit rating to qualify to offer customers the solar lease or Power Purchase Agreement PPA). Some prefer the idea that they make more money by selling the product directly.
The first solar loan we will talk about is the PACE (Property Assessed Clean Energy) program. It is the most popular solar loan available to small and big contractors. PACE solar loans are almost the same concept of refinancing your house: taking out money to pay for your solar system. The good side of this solar loan is that it’s faster.
From how it was presented to us the PACE solar loans don’t affect your debt to income ratio of the home owner and doesn’t need a high credit score to qualify. It needs equity in the house and some other requirements that are basic for most of these solar loans. The PACE loan is as if the house is borrowing the money and not the home owner. The PACE Solar loan is a full amount loan and doesn’t usually have a prepayment penalty.
The second solar loan we will talk about is the SAC solar loan, or the same as cash solar loan. The SAC Solar loan idea is like a credit card with 12-18 months no interest. The SAC solar loan is also called a bridge loan. The way the SAC solar loan would be used is to finance the amount of the cost of the solar federal income tax credit . So, cash buyers wouldn’t need to put the full system cost upfront but only pay 70% of the cost. When they get back the 30% tax credit (if they qualify for it), they pay off the SAC solar loan. The only disadvantage of the SAC solar loan is that if the customer doesn’t qualify for tax credit and doesn’t receive it, he/she will be stuck with the high interest rate after the 0% interest period.
The third type of loans is a secured full amount solar loan. The full amount solar loan is a solar loan that is secured with either the property or the solar equipment. So, the solar loan provider lends the full amount of the solar system cost to the home owner; taking the house or the solar equipment as collateral. When the home owner gets the tax credit he/she can prepay that part of the loan; reducing the monthly payment.
The fourth type of loans is an unsecured full amount solar loan. The full amount solar loan is a solar loan that is based on the credit of the home owner. So, the solar loan provider lends the full amount of the solar system cost to the home owner without taking the house or the solar equipment as collateral. When the home owner gets the tax credit he/she can prepay that part of the loan reducing the monthly payment.
There are a lot of other solar loans and sometimes companies use different loans together so it can be confusing.
How can you choose the best solar loan for you? Scroll down to schedule your free consultation to find the best solar loan (in our opinion) for you!