Sungage Financial zero-fee loan: The complete review

Solar loans are a very popular way to pay for a new solar or solar plus storage system since they are a great way to take advantage of the benefits of solar ownership–from tax incentives to increased home value–without requiring you to have the cash on hand to pay for the entire system upfront. Moreover, many solar-specific loans offer low, fixed interest rates and flexible payment terms, helping you find the monthly payment that's right for you. However, a low-interest rate (or APR) comes with a caveat: a low APR often means a high borrowing cost. That cost or fee to borrow money is passed on to your installer or even built into the project's overall cost, making a tradeoff between the lowest monthly payment (i.e., low APR) and the lowest project cost (i.e., lowest cost to borrow money).

Recently, Sungage Financial, one of the most popular solar loan providers on EnergySage, launched a zero-fee solar loan to keep your solar project costs as low as possible. Here's what that means for solar shoppers like you.

The Sungage Financial zero-fee loan is very transparent and quite flexible. The loan is available in five different term lengths: 5, 10, 15, 20, and 25 years. The loan comes with a standard annual percentage rate of 7.49% for any loan duration. And each loan term length has no fee to either the homeowner or the solar installer.

This has a couple of key benefits for solar shoppers and installers alike:

• No matter your circumstances, you'll know exactly what loan rate you'll get before you apply for the solar loan;

• It's easy to calculate what your loan payments will be quickly (any online loan calculator will do), making your monthly payments very transparent;

• The transparency makes for a smooth transition between considering paying for your project in cash versus with a loan;

• And finally, all of Sungage's loan options–including the no-fee loan–have no prepayment penalty and only require a soft pull of your credit score, as opposed to a hard pull of credit, which can impact your score.

Sungage also allows you to set aside the state and federal tax incentives you'll receive with your solar project in a "Zero Interest Portion" of your loan, with that portion of the loan deferred until June of the year following installation (i.e., one tax season later). This feature, unique to Sungage loans, means you avoid paying interest on the tax incentives you're receiving for your project, keeping your overall costs lower. The feature also means you can use a Sungage loan similar to a bridge loan. This Sungage loan can help if you want to start your project immediately while exploring home equity lines of credit or other financing options.

The Sungage no-fee loan is only available to pre-approved dealers in the Sungage Financial network.

Historically, solar loans have included an installer fee, which is the cost to your solar installer for doing business with your chosen financing company. Fees can include origination fees and any costs to your solar installer to reduce the APR on your solar loan.

Typically, fees are passed on to solar shoppers by solar installers. Here's how it works: Say your solar panel system costs $20,000, and you finance it with a 5-year loan at an APR of 3.99%; you would expect to pay $20,000 in principal plus any interest that accrues over the loan's lifetime. In reality, to receive an APR that low, your financing company will charge your installer a fee, which can raise the total cost–i.e., the principal–of your loan. In other words, instead of paying $20,000 plus interest, you could be paying $22,000 plus the interest on that higher principal value, and a lot of the time, you might not even know the fee is being added or what percentage it will be.

And that's exactly where zero installer fee loans can come into play. By removing the installer fee, the actual price you'll pay for solar is much more transparent: the principal of your solar loan is the same as the total system cost, and no more, providing transparency into the true price you're paying for solar.

EnergySage makes starting your solar–or solar-plus-storage–project easy. When you register for a free account on the EnergySage Marketplace, we'll gather custom solar quotes from solar companies in your area. Many of our solar companies are approved Sungage dealers–be on the lookout for the Sungage Financial Certified Partner badge in our installer profiles, which tells you that your installer can offer the zero-fee loan. All you need is an address, an email, and an electricity bill, and you can get custom solar quotes for your home or business from EnergySage today.