Solar arrays can be expensive. Solar installers have the pleasure of helping customers make decisions about how to finance their installation. In our experience, many customers may be more satisfied with a short term loan. Here are some advantages that you can use to help your customers make the decision.
The upside of short term loans
It costs less!
With a shorter loan, less money is spent on interest. More and more interest is added to the loan balance the longer your client owes money to the lender. With a shorter term, they will be paying everything back faster. Thus, there is less time for interest to accrue. Even if the interest rate is higher than with a long-term loan, they can spend less on interest overall.
Paying back a short loan can improve credit scores
Customers with low credit scores may want to take a loan for a short term with the objective of improving their credit score. If they make timely payments and complete the loan on time, it can offer a big boost to their credit score.
Fast-track to ownership
If your customer is taking a shorter term loan, they will own the full system in less time. Easy, right? This is attractive for many reasons, but mostly for security. Full ownership contributes to peace of mind, makes selling the home easier, and is the end goal with any large purchase.
Long-term loans suck
Most people don't like the idea of a 20-30 year loan, and why would they? Short term loans will be repaid within a few years. This can save them from burdening their bank accounts and adding stress for many years to come. It also reduces the risk of something coming up a decade or two down the road and them being unable to pay for it as a result of the loan.
Ultimately, the choice will come down to the financial position of the customer. If they are able to take a shorter term loan, there can be many benefits. If not, then long term options can be viable and result in a happy customer anyway.