Make a positive investment by borrowing money to help you live a greener lifestyle.
Going green is a good investment if your energy costs are rising. Green personal loans can help you find the cash to buy more energy-efficient goods and start saving sooner.
Home solar, electric cars and energy-efficient systems for air conditioning or hot water can save you a lot of money in the long run. Whether you’re just a bit short on cash or want to finance an efficient system outright, green personal loans can step in to help you take advantage of these opportunities.
How does a green personal loan work?
These personal loans can generally be put towards an approved range of energy and cost-saving purchases. The loan terms can be flexible, and may vary depending on your purchase.
- Secured and unsecured. You can find both secured and unsecured green loans.
- Varying repayment periods. Terms range from as little as 6 months to as long as 7 years.
- Flexible borrowing limits. There are a lot of potential purchases that qualify for green loans, reflected in a wide range of borrowing limits to suit different items.
- Early repayments. You’ll often be able to make early repayments without penalty.
| How much you can borrow | Comparison rates | Loan terms available | Features | |
|---|---|---|---|---|
| Bendigo Bank Green Personal Loan | $2,000 minimum | Rates may vary | Loan periods from 1 to 7 years |
|
| Community First Credit Union Green Loan | $1,000 to $35,000 | 6.39% p.a. | 1 to 10 years |
|
| Hunter United Green Personal Loan | $2,000 to $30,000 | 11.46% p.a. | Up to 7 years |
|
| Nova Credit Union Green Loans | You may be able to borrow as much or as little as you need, within reason and depending on your situation. | 7.45% p.a. | Choose from a flexible range of repayment periods |
|
| LCU Green Personal Loan | $2,000 to $50,000 | 7.05% p.a. | Loan periods up to 7 years |
|
| RateSetter Green loans | $2,000 to $45,000 | 6 months to 7 years |
|
What can a green loan be used for?
Some green loans can only be used with a specific range of items, while others can be put towards almost anything eco-friendly.
Energy-efficient purchases can include almost anything that directly cuts your energy bill, or helps you use less energy.
Green purchases might include:
- Solar hot water heaters
- Home solar panels
- Battery energy storage for new or existing systems
- Electric or hybrid vehicles
- Insulation
- Energy efficient air conditioning or heaters
- Solar pool heaters
- Outdoor awnings
- Rainwater tanks
- Energy-efficient LED lighting
- Double glazing for windows
- Energy efficient appliances
How to compare green loans
Make sure you can put the loan towards your intended purchase. When deciding on a lender, consider features including:
- Interest rates. Look at whether the rates are fixed or variable, and see how it compares to other loan options.
- Comparison rates. This is a rate that includes built-in fees for the first year of the loan, so you can get more of an idea how loans compare to each other.
- Minimum loan amount. Make sure you can borrow as little, or as much, as suits your needs.
- Application fee. Consider any application fees, and all other fees that may apply.
- Repayment flexibility. Are you able to make early repayments without penalty?
- Security. It is a secured or an unsecured loan?
Green Loans you can apply for
Things to avoid when taking out a green loan
- Borrowing too much. To maximise your value for money, you may want to only borrow as much as you need, and using savings for the rest, rather than financing more.
- Unlicensed lenders. Make sure you’re dealer with a reputable lender, licensed and listed on the ASIC professional register.
- Excessive fees and charges. Watch out for excessive application fees, and any others which might to be paid.
Frequently asked questions about green loans
Am I eligible for a loan?
Different lenders have different eligibility requirements. To be eligible for a green personal loan you will typically need to be age 18+, an Australian resident and you will need to be using it to improve your environmental efficiency.
How much can I borrow?
The minimum and maximum borrowing amounts vary between lenders, and may depend on what you’re using the money for.
Is it worth using a loan to go green?
It depends on your situation. Sometimes it might be more worthwhile than others. In the long run, buying a $1,000 energy-efficient refrigerator with the help of a $500 loan might be better value than just buying a $500 fridge with your savings.
Similarly, using a green loan to install a home solar system might end up saving someone more than if they had to wait another 5 years.
Picture: Shutterstock
