Solar Loans: Compare Solar Panel Financing Options

Annie Millerbernd
Written by
Last updated on December 13, 2023
Edited by
✅ Fact checked and reviewed
Kim Lowe
Edited by
✅ Fact checked and reviewed

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Compare the best solar loans

NerdWallet reviewed more than 35 financial institutions to find the best personal loans for financing solar panels. These are our top picks.

SoFi
5.0
Read full review
Est. APR8.99-29.99%
Est. APR8.99-29.99%
Loan amount$5K-$100K
Loan amount$5K-$100K
Min. credit scoreNone
Min. credit scoreNone
Repayment terms2 to 7 years
Repayment terms2 to 7 years
on SoFi's website
on NerdWallet
SoFi
Est. APR8.99-29.99%
Est. APR8.99-29.99%
Loan amount$5K-$100K
Loan amount$5K-$100K
Min. credit scoreNone
Min. credit scoreNone
Repayment terms2 to 7 years
Repayment terms2 to 7 years
on SoFi's website
on NerdWallet
Pros
  • Joint loan option.
  • Multiple rate discounts.
  • Mobile app to manage loan.
Cons
  • No option to choose initial payment date.
  • High minimum loan amount.
SoFi offers online personal loans with consumer-friendly features for good- and excellent-credit borrowers.
  • Good for those with little credit history and high income.
  • No origination fee, late fee, prepayment fee or other fees.
  • SoFi offers networking events and career development advice to borrowers.
  • Personal-check processing fees: None.
Lightstream
4.5
Read full review
Est. APR6.99-25.49%
Est. APR6.99-25.49%
Loan amount$5K-$100K
Loan amount$5K-$100K
Min. credit score660
Min. credit score660
Repayment terms2 to 7 years
Repayment terms2 to 7 years
on LightStream's website
on NerdWallet
Est. APR6.99-25.49%
Est. APR6.99-25.49%
Loan amount$5K-$100K
Loan amount$5K-$100K
Min. credit score660
Min. credit score660
Repayment terms2 to 7 years
Repayment terms2 to 7 years
on LightStream's website
on NerdWallet
Pros
  • No fees.
  • Rate discount for autopay.
  • Long repayment terms on home improvement loans.
  • Rate Beat program and Experience Guarantee.
Cons
  • No option to pre-qualify with a soft credit check on its website.
  • No direct payment to creditors with debt consolidation loans.
  • High minimum loan amount.
LightStream targets strong-credit borrowers with no fees and low rates that vary based on loan purpose.
  • Suitable for those with excellent credit profiles.
  • No origination fee.
  • Late fees: None.
  • APRs include 0.5% discount for automatic payments.
  • Does not issue college or business loans.
  • Payment example: Monthly payments for a $5,000 loan at 12.8% APR with a term of 3 years would result in 36 monthly payments of $168.
Est. APR8.99-35.99%
Est. APR8.99-35.99%
Loan amount$2K-$50K
Loan amount$2K-$50K
Min. credit score600
Min. credit score600
Repayment terms3 to 5 years
Repayment terms3 to 5 years
on Best Egg's website
on NerdWallet
Est. APR8.99-35.99%
Est. APR8.99-35.99%
Loan amount$2K-$50K
Loan amount$2K-$50K
Min. credit score600
Min. credit score600
Repayment terms3 to 5 years
Repayment terms3 to 5 years
on Best Egg's website
on NerdWallet
Pros
  • Option to pre-qualify with a soft credit check.
  • Wide range of loan amounts.
  • Unsecured and secured loan options.
  • Direct payment to creditors with debt consolidation loans.
  • No late fees.
Cons
  • Origination fee.
  • No rate discounts.
  • No option to choose initial payment date.
  • No mobile app to manage loan.
Best Egg offers personal loans for borrowers who want to consolidate debt and need cash fast.
  • Very fast funding available, often within a day.
  • Ideal for those with good credit score and several years of credit history.
  • Origination fee: 0.99% - 9.99%.
  • Personal check processing fee: None.
Est. APR8.49-35.99%
Est. APR8.49-35.99%
Loan amount$1K-$50K
Loan amount$1K-$50K
Min. credit score560
Min. credit score560
Repayment terms3 to 7 years
Repayment terms3 to 7 years
on Upgrade's website
on NerdWallet
Est. APR8.49-35.99%
Est. APR8.49-35.99%
Loan amount$1K-$50K
Loan amount$1K-$50K
Min. credit score560
Min. credit score560
Repayment terms3 to 7 years
Repayment terms3 to 7 years
on Upgrade's website
on NerdWallet
Pros
  • Secured and joint loans.
  • Multiple rate discounts.
  • Mobile app to manage loan payments.
  • Direct payment to creditors with debt consolidation loans.
  • Long repayment terms on home improvement loans.
Cons
  • Origination fee.
  • No option to choose your payment date.
Upgrade personal loans offer multiple rate discounts and direct payment to creditors. A low minimum credit score requirement makes the perks stand out even more.
  • Successful borrowers’ average credit score is 675.
  • Origination fee: 1.85% to 9.99% of loan amount.
  • Late fee: $10 after 15-day grace period.
Est. APR8.98-35.99%
Est. APR8.98-35.99%
Loan amount$1K-$40K
Loan amount$1K-$40K
Min. credit score600
Min. credit score600
Repayment terms2 to 5 years
Repayment terms2 to 5 years
on NerdWallet
Est. APR8.98-35.99%
Est. APR8.98-35.99%
Loan amount$1K-$40K
Loan amount$1K-$40K
Min. credit score600
Min. credit score600
Repayment terms2 to 5 years
Repayment terms2 to 5 years
on NerdWallet
Pros
  • Joint loan option.
  • Direct payment to creditors with debt consolidation loans.
  • Option to pre-qualify with a soft credit check.
  • Option to change your payment date.
Cons
  • Origination fee.
LendingClub personal loans are a solid option for good-credit borrowers looking to consolidate debt and build their credit.
  • Suitable for those with good credit profiles.
  • Origination fee: 3% to 6% of loan amount.
  • Late fee: The greater of 5% of the unpaid amount, or $15.
  • Personal-check processing fee: $7.
  • Other fees: $15 unsuccessful payment fee.
Est. APR7.49-18.00%
Est. APR7.49-18.00%
Loan amount$250-$50K
Loan amount$250-$50K
Min. credit scoreNone
Min. credit scoreNone
Repayment terms1 to 5 years
Repayment terms1 to 5 years
on NerdWallet
Est. APR7.49-18.00%
Est. APR7.49-18.00%
Loan amount$250-$50K
Loan amount$250-$50K
Min. credit scoreNone
Min. credit scoreNone
Repayment terms1 to 5 years
Repayment terms1 to 5 years
on NerdWallet
Pros
  • Wide range of loan amounts.
  • Fast funding.
  • Rate discount for some customers.
  • Co-sign, joint and secured loan options.
  • Direct payment to creditors with debt consolidation loans.
Cons
  • Exclusive to credit union members.
  • No option to pre-qualify with a soft credit check.
  • No option to choose or change your payment date.
Navy Federal personal loans may be a good fit for most members, thanks to flexible amounts, consumer-friendly features and quick funding time.
  • 1 to 5 years; up to 15 years for home improvement loans.
  • Navy Federal offers its members a flexible loan product with multiple loan amounts and repayment terms to choose from, plus 24/7 customer support.
Est. APR8.99-35.99%
Est. APR8.99-35.99%
Loan amount$5K-$50K
Loan amount$5K-$50K
Min. credit score620
Min. credit score620
Repayment terms2 to 5 years
Repayment terms2 to 5 years
on Achieve's website
on NerdWallet
Est. APR8.99-35.99%
Est. APR8.99-35.99%
Loan amount$5K-$50K
Loan amount$5K-$50K
Min. credit score620
Min. credit score620
Repayment terms2 to 5 years
Repayment terms2 to 5 years
on Achieve's website
on NerdWallet
Pros
  • Option to pre-qualify with a soft credit check.
  • Multiple rate discounts.
  • Direct payment to creditors with debt consolidation loans.
  • Joint loan options.
Cons
  • Charges origination fee.
  • Not available in all states.
  • No mobile app to manage loan.
  • High minimum loan amount.
Achieve is a strong option for debt consolidation loans. Borrowers can have funds paid directly to creditors and benefit from multiple rate discounts.
  • Origination fee: 1.99% to 6.99% of the loan amount.
  • Late fee: $15.
  • Personal-check processing fee: $15 for non-autopay.

» MORE: Compare the best home improvement loans

What is a solar loan?

A solar loan is an unsecured personal loan that’s used to pay for solar panels and their installation. Banks, credit unions and online lenders provide solar loans. Typical loan amounts are $1,000 to $100,000, and annual percentage rates are 6% to 36%.

How do solar loans work?

Solar loans are installment loans. You receive money in a lump sum and repay it in equal monthly installments over a predetermined period, typically two to seven years.

Unlike with home equity financing, there’s no collateral on solar loans. This means your property isn’t at risk if you miss payments, but it also means interest rates can be high.

How to compare solar loans

Compare these features to find a low-cost loan that fits your budget:

  • Annual percentage rate: APR represents the total cost of a loan, including interest and any fees. The loan with the lowest APR is the least expensive.

  • Monthly payment: Affordable monthly payments are as important as getting a low rate. Be sure loan payments fit comfortably into your budget because missed or late payments can negatively affect your credit.

  • Fees: Some lenders charge an origination fee that’s typically 1% to 10% of the loan amount. The lender may take the fee before sending you the funds, thereby lowering the amount you receive.

  • Term: The loan’s repayment term helps determine the monthly payments. Loans with longer repayment terms have lower payments but cost more in total interest.

How to get a solar loan

  1. Get a cost estimate. Compare bids from multiple solar panel installation companies. This will tell you how much you need to borrow.

  2. Calculate solar loan payments. Use a solar loan calculator to determine what APR and repayment term will get you an affordable monthly payment.

  3. Check your rate. Many lenders offer pre-qualification, which lets applicants preview their potential loan rate, amount, monthly payment and repayment term. This requires only a soft credit pull, so you can review multiple offers before applying.

  4. Apply. Once you accept a loan offer, the lender may require documents to verify your employment, income, address and other information. Have your W-2s and tax documents ready to make the application process go smoothly.

  5. Get funded. If approved, expect to receive funds within a week.

Solar panel tax benefits

The federal government provides a 30% tax credit for those who purchase and install a solar panel system between 2022 and 2032. The credit will decrease to 26% in 2033 and 22% in 2034.

If you install solar panels in 2024, you could receive a $6,000 credit on a $20,000 system with the federal tax credit alone.

You can take advantage of tax benefits if you own your system, no matter how you pay for it.

Tax credits reduce your tax liability. If you get a $6,000 credit, you can reduce your tax bill by $6,000. This credit is nonrefundable, meaning if you don’t owe taxes — or owe less money than the 30% credit amounts to — you won’t get that money back in a refund. You can, however, carry any unused credit amount to a future tax year.

Some states also offer tax benefits and other incentives for solar installation. You can look up your state’s offerings in the Database of State Incentives for Renewables and Efficiency.

Other types of solar loans

Solar company financing

Some solar companies offer financing through third-party lenders. These loans can be similar to home improvement loans — unsecured with no down payment required. The payment plans could have lower rates and longer repayment terms than personal loans, making your monthly payment lower.

Compare a quote from a solar company with other options to find the least expensive one.

Home equity loan

If you know how much your solar panels will cost, you can apply for a fixed-rate home equity loan. These loans have lower rates and longer repayment terms than unsecured loans because putting up your home as collateral lowers the risk for a lender.

Home equity line of credit

A HELOC is another low-rate option that is secured by your home. It’s more flexible than a home equity loan because you can draw on funds as you need them, and you often have the option to pay only interest during the initial portion of the loan. Unlike personal and home equity loans, HELOCs have variable rates.

Cash-out refinance

A cash-out refinance is a second mortgage that’s larger than your current mortgage. You use the new loan to pay the old loan and “cash out” the difference to purchase solar panels. It’s a good option if current mortgage rates are lower than what you’re paying and if you can keep closing costs low.

Closing costs can be 2% to 6% of the mortgage’s cost. That means a $350,000 mortgage can cost $21,000 in closing costs — which is more expensive than some solar panel systems.

Leasing or getting a power purchase agreement

If you don’t want to make a large upfront payment or are ineligible for federal and state tax credits, consider a power purchase agreement or leasing solar panels.

In both cases, you pay little or no upfront costs to essentially rent the solar panels. The owner of the panels collects rent from you and receives any available tax incentives from the government. You’re also not responsible for maintenance.

The U.S. Department of Energy has more details about the difference between a lease and power purchase agreement.

Are solar panels a good investment?

Here’s how to determine whether solar panels are worth the investment:

Calculate your sun exposure, costs and savings. Solar panels will help people in some parts of the country save more money than others. For example, someone in Seattle might not get the same value from solar panels as someone in Phoenix because of the disparity in sunshine.

To estimate your savings, you first need to know how many kilowatt-hours you use and how much you’re paying for them. In 2022, the average household used 889 kilowatt-hours each month, according to the latest data from the U.S. Energy Information Administration. In September 2023, residential customers paid an average of nearly 16.29 cents per kilowatt-hour.

Then, figure out what size system you’ll need. You can use a solar savings calculator to see how many panels your home would need and how much energy they would generate.

Estimate your payback period. Your solar loan payback period is the length of time it takes for your electric bill savings to match the cost of installing the system. This will be years, not months.

Let’s say you pay $17,000 for new solar panels and they save you $1,500 per year on your utility bills. Your payback period would be a little over 11 years.

Other factors that determine your payback period include maintenance costs and whether utility rates change in your area.

Last updated on December 13, 2023

Methodology

NerdWallet’s review process evaluates and rates personal loan products from more than 35 technology companies and financial institutions. We collect over 50 data points from each lender 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.

NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.

To recap our selections...

NerdWallet's Solar Loans: Compare Solar Panel Financing Options

  • SoFi Personal Loan: Best for Solar loans
  • LightStream: Best for Solar loans
  • Best Egg: Best for Solar loans
  • Upgrade: Best for Solar loans
  • LendingClub: Best for Solar loans
  • Navy Federal Credit Union Personal Loan: Best for Solar loans
  • Achieve Personal Loans: Best for Solar loans

Frequently asked questions

  • The best solar panel financing option is the one with the lowest annual percentage rate. If you have equity in your home, that may mean getting a home equity loan or line of credit. If not, a personal loan can be used for solar panels. The lowest rates go to borrowers with high credit scores and incomes.

  • You get an unsecured solar loan in a lump sum and repay it, with interest, in fixed monthly installments. Repayment terms are typically from two to seven years, and payments usually start one to three months after the loan is funded. Use a solar loan calculator to calculate monthly payments.

  • Solar loans are typically unsecured personal loans used to finance the purchase and installation of solar panels. These loans can have amounts from $1,000 to $100,000 and are repaid in monthly installments, typically over two to seven years. Personal solar loans are one way to fund solar panels; other options include home equity, federal incentives or leasing if you aren't ready to buy.

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