Solar loan interest rates generally fall within a range that is competitive with other types of loans, but they can vary based on the lender, borrower’s credit, and other factors. Here’s a comparison with other loan types:
Solar Loans
- Range: Typically from 3.99% to 16.99% APR, though some lenders like LightStream offer rates in this range. More commonly, rates range from 6% to 36%.
- Features: Often unsecured, meaning no collateral is required. Loan terms typically range from 5 to 25 years.
- Dealer Fees: Some loans include dealer fees that can increase the principal amount.
Personal Loans
- Range: Generally higher than solar loans, often between 6% and 36% APR.
- Features: Unsecured, with terms generally shorter than solar loans, often 2 to 7 years.
Home Equity Loans
- Range: Lower than many solar loans, with fixed rates often below 8% APR because they are secured by your home.
- Features: Fixed rates, longer repayment terms (up to 30 years), and lower interest rates due to collateral.
Home Equity Lines of Credit (HELOCs)
- Range: Variable rates, often starting lower than fixed-rate loans but can increase over time.
- Features: Secured by your home, offering flexibility in drawdowns and repayments.
Credit Cards
- Range: Higher than most solar loans, often above 15% APR.
- Features: Revolving credit, no fixed term, but with high interest charges.
In summary, solar loans offer competitive rates compared to personal loans and credit cards, especially for those with good credit. They can be more advantageous than HELOCs for fixed-rate seekers and without the need for home equity as collateral. Home equity loans and HELOCs, on the other hand, offer lower rates due to being secured by collateral.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-do-solar-loan-interest-rates-compare-to-other-types-of-loans/
