HomiCrew

Paying over time

Financing, explained before you sign

How a loan can change the price in a quote, what to ask, and where lower-cost options usually come from.

We are not a lender and do not arrange loans. Financing information here is general education; lenders decide terms.

Ask for the cash price first

Before anyone talks about monthly payments, ask for two totals on the same work, in writing: the price if you pay by check, and the price with their financing. A monthly payment alone hides the total.

“What is the total price if I pay by check, and what is the total price if I use the financing you offered? Which lender, what APR, and is any lender fee already in the price?”

If the two totals differ, the difference is what the loan costs you before any interest.

A lender's fee can sit inside the financed price

Some lenders charge the contractor a fee for offering their loan, and the contractor can raise the price to cover it. Whether a quote you get does this depends on the lender and the loan, so ask.

What the CFPB and the FTC say

The Consumer Financial Protection Bureau looked at solar loans and found fees of this kind, which the industry calls “dealer fees,” added into the loan amount, often without saying the price is a markup over the cash price. The Federal Trade Commission's advice is the same in plain words: do not accept financing through your contractor without shopping around and comparing loan terms.

Example, not a quote. These numbers are made up to show the arithmetic. They say nothing about any real lender or price.

  • Option A: Pay by check

    Price
    $10,000
    APR on the paper
    None
    Monthly (60 mo)
    None
    You pay in total
    $10,000

  • Option B: “0% financing” from the contractor

    Price
    $12,500
    APR on the paper
    0%
    Monthly (60 mo)
    $208.33
    You pay in total
    $12,500

  • Option C: An ordinary 9% loan on the cash price

    Price
    $10,000
    APR on the paper
    9%
    Monthly (60 mo)
    $207.58
    You pay in total
    $12,455.01

Option B says 0%, but its price is $2,500 higher than the cash price, so the cost is already inside the price. Its monthly payment of $208.33 ends up close to option C, a loan with a real 9% rate. The APR on the paper looks better; the total you pay does not. That is why the cash price comes first.

PACE loans are repaid through your property tax bill

A PACE loan is repaid as an added charge on your property tax bill. The CFPB notes that, as with other property tax liens, failing to pay could cost you your home.

Before you sign, ask

  • Whether the charge is a lien on your home, and where it ranks.
  • The total you will pay over the whole term, not just the yearly amount.
  • In writing, how it would affect selling or refinancing. Take the paperwork home to read first.

Compare it with a loan from a bank or credit union before you decide.

Where lower-cost loans usually come from

Some utilities and some credit unions offer low-rate or 0% loans for energy-saving projects. Terms, limits and eligible projects vary, so check each one's own rules. These are plain web searches and a government locator; we earn nothing from them and recommend no lender.

Check a payment

Use the APR a lender quoted you. The calculator runs in your browser; nothing you type is sent anywhere.

Monthly payment estimate

Type the amount you would borrow, the APR a lender quoted you, and the number of months.

Enter an amount, an APR and a number of months.

Estimate; lenders decide. This is a level monthly payment for a fixed-rate loan, worked out from the three numbers you typed. It is not an offer, a quote or an approval. A real loan can add fees, and the lender sets the rate, the term and whether you qualify. We are not a lender and do not arrange loans. Financing information here is general education; lenders decide terms.

Sources

General information, not legal, tax or financial advice. We are not a lender and do not arrange loans. Financing information here is general education; lenders decide terms.