How we chose the best personal loans
Our team of consumer lending experts follows an objective and robust methodology to rate lenders and pick the best.
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Lenders reviewed
We review over 35 lenders, including major banks, top credit unions, leading digital platforms, and high interest installment lenders operating across multiple states.
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Categories assessed
Each lender is evaluated across five weighted categories and 27 subcategories, covering affordability, eligibility, consumer experience, flexibility, and application process.
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Data points analyzed
Our team tracks and reassesses hundreds of data points annually, including APR ranges, fees, credit requirements, and borrower tools, ensuring up to date, accurate comparisons.
Star rating categories
We evaluate more categories than competitors and carefully weigh how each factor impacts your experience.
We review lenders’ annual percentage rate offerings at least twice per year and the competitiveness of each lenders’ APR range. We also assess whether a lender charges an origination fee and any opportunity for borrowers to receive a rate discount.
We consider the experience of the consumer trying to manage a personal loan, which means accessibility of customer service representatives, whether borrowers can choose and change their payment due date, and the ability to track their loan on a mobile app.
Underwriting and eligibility
We consider the rigorousness of each lender’s underwriting practices and how widely available their loans are. This category includes whether a lender does a hard credit check before providing a loan, the range of credit profiles they accept and how many states their loans are offered in.
We assess how flexible lenders can be with borrowers, including whether they offer multiple loan types, personal loan amounts and repayment term options and whether they offer direct payment to creditors on debt consolidation loans.
We consider the lender’s full application process, including a borrower’s ability to preview their loan offer via pre-qualification, whether basic loan information such as APR range and repayment terms are available and easy to find online and how quickly a loan can be funded after approval.
NerdWallet’s review process evaluates and rates personal loan products from more than 35 financial technology companies and financial institutions. We collect over 70 data points and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.
What are HVAC loans?
Maintaining a comfortable temperature in your home depends on a smooth-running heating, ventilation and air conditioning — or HVAC — system.
HVAC loans are unsecured personal loans that you use to purchase or replace an HVAC system. Upon approval, you receive the loan in a lump sum and repay it in fixed monthly installments over a period of about two to seven years.
Qualifying for a personal loan primarily depends on your credit and finances. Borrowers with high credit scores, stable income and little debt receive the lowest rates and largest loan amounts.
Rates on personal loans typically range from 6% to 36%, and loan amounts are $1,000 to $100,000. Many online lenders allow you to pre-qualify and see your loan rate and term before formally applying. Pre-qualifying doesn't affect your credit score. HVAC loan example
For an excellent-credit borrower, a $7,000 loan with a two-year repayment term and 11.10% annual percentage rate (APR) would require monthly payments of $327 and cost $7,838 including interest, according to NerdWallet’s home improvement loan calculator. HVAC loan considerations
As with any home improvement purchase, it's a good idea to compare multiple financing options. Here are things to consider about personal loans.
Loan amount: Personal loans are best for large, one-time purchases. You may not find a personal loan small enough to cover a repair that costs a few hundred dollars. A personal loan, unlike a line of credit, distributes the funds all at once, so you won’t be able to borrow more from the same loan if sudden expenses come up.
APR and fees: APR, which is the loan's interest rate plus any fees the lender charges, is the best way to compare the total costs of different loans. The loan with the lowest APR is the cheapest. Some lenders charge origination fees from 1% to 10% of the loan amount and deduct the charge from your loan before depositing the money into your account. Repayment term: A longer repayment term on a personal loan means lower monthly payments, but you’ll pay more overall interest. Factor monthly payments into your budget to determine what amount you can manage over the loan's term. Funding time: Pre-qualifying for a personal loan with an online lender can take minutes, and some lenders will fund a loan the same day you’re approved or the following business day.
How to get an HVAC loan
Get a firm cost estimate. Understanding the exact cost of your new HVAC system will help you determine how much you need to borrow and narrow down your lender options.
Check your credit. Your credit score plays an important role when qualifying for a loan. You can check your credit reports for free with NerdWallet or at AnnualCreditReport.com. Pre-qualify. Lenders have unique qualification requirements, so pre-qualifying with multiple lenders allows you to compare offers and choose one with the loan amount and rate that fits your expense and budget.
Apply. Once you’ve chosen a lender, gather documents like your W-2s and bank statements and formally apply for an HVAC loan. Most lenders let you apply online, but some banks and credit unions may require submitting an application in person. If approved, expect to receive funds within a week.
HVAC financing alternatives
Emergency fund: While not technically a financing option, your emergency savings is made for expenses like a new HVAC system. When there are extreme temperatures outside, a broken AC or heating unit constitutes an emergency.
HVAC company financing: Some companies that sell and install HVAC systems also offer financing through third-party lenders, like Greensky or Ally. Rates and terms vary across contractors. Rolling your installation and payment plan together can be a convenient option if it's also the most affordable one. 0% interest credit card: Consumers with good or excellent credit (690 or higher scores) may qualify for a credit card with a zero-interest promotional period. Be sure to pay off the balance during the interest-free term — usually 15 to 21 months — to avoid paying the card’s regular interest rate. Government loans: You may qualify for an FHA Title 1 loan, which can be used to improve your home’s “basic livability and utility,” according to the Department of Housing and Urban Development. Another option is to finance HVAC repairs or a replacement with an FHA 203(k) loan. These programs each have their own requirements and may prolong your installation’s timeline, but they could save you money. Borrowers with low income may be eligible for federal assistance through the Low Income Home Energy Assistance Program (LIHEAP). How much does a new HVAC system cost
A new HVAC system can cost from $5,000 to $12,500, according to Angi, an online platform that connects homeowners with local home service professionals. Your overall costs can increase if you need a larger overhaul, such as replacing ductwork, or if you want premium features in the new system.
Be ready to also budget for removal and disposal costs of an existing system when installing a new HVAC.
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