Homeowner’s guide to financing solar with Sunlight Financial

Updated

sunlight financial solar and home improvement loan company
Image source: Sunlight Financial

Sunlight Financial LLC is a point-of-sale financing company that supplies loans for homeowners who are making solar and home improvement purchases. Sunlight Financial partners with contractors in the solar and home improvement industries to help customers fund expensive home upgrades through affordable loans.

Thousands of companies across the country are Sunlight partners, so you’ll probably come across this financing company when you're looking to upgrade your home. Before you sign that loan agreement, though, you might want to learn a little more about Sunlight Financial. 

This helpful guide will give you an idea of what financial services Sunlight provides, as well as details about their loans and how to qualify for them. 

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    Key takeaways

    • Sunlight Financial offers solar loans between $10,000 and $100,000.
    • Sunlight Financial requires a minimum credit score of 650.
    • Loan terms range from 3 months to 25 years.
    • Sunlight Financial’s interest rates can fall between 0.00% and 6.99%, depending on the term and borrower’s creditworthiness.
    • Financing a solar system with Sunlight Financial can increase the price of an installation up to $5.00 per watt because of dealer fees.

    Overview of Sunlight Financial solar loans

    Since the company’s founding in 2014, Sunlight Financial has become one of the top solar financing options in the U.S. In fact, Sunlight Financial was named one of the top 10 fastest growing financing companies in the country by Inc. Magazine in 2020. Sunlight has funded over $4 billion worth of loans to date. 

    Sunlight Financial acts as the middleman between contractors and banks. Basically, Sunlight has two separate networks: 

    • A group of capital providers who lend out the money
    • Contractors and solar installers who actually carry out the installations

    Solar companies partner with Sunlight to close more deals by giving homeowners easy access to financing, and the capital providers get to make money through interest payments. But how exactly does Sunlight Financial make any money in this?

    Well, Sunlight works with their bank partners to figure out predetermined dollar amounts they will offer as loans for certain projects. Sunlight then collaborates with solar companies to figure out a price to charge homeowners for the installation. The difference between the total loan amount and how much the solar installers charge for their services is paid to Sunlight. 

    What types of loans does Sunlight Financial offer?

    Sunlight Financial provides unsecured loans with fixed interest rates. Unsecured loans tend to have higher interest rates than other types of loans. But they don’t require an asset, so if you miss payments, you won’t lose your house. 

    Some of their loans come with deferred interest rate options, meaning you won’t have to pay any interest as long as you pay off the entire balance of the loan before the deferred interest rate period is up. 

    Sunlight Financial offers solar loans between $10,000 and $100,000. You can select loan terms from just 3 months to up to 25 years with interest rates between 0.00% and 6.99%. The first loan payment is due 60 days after the installation, even if the system isn’t turned on yet.

    How much will your solar system cost with a Sunlight Financial loan? 

    When you finance a solar installation with a Sunlight Financial loan, you are paying for two things: 

    • The installation services provided by your solar contractor
    • Sunlight Financial for their financing services 

    You pay Sunlight Financial through a dealer fee, which will increase the overall cost of installing solar on your roof. Sometimes, the solar company will absorb part of the dealer fee; you might also see the dealer fee rolled into the principal of the loan. 

    In the case of the latter, the dealer fee will probably be accounted for in whatever price per-watt the solar company provides you for the installation. So, instead of seeing the average $3.00 cost per watt, you may see something as high as $5.00 per watt. 

    This means a 7 kilowatt (kW) solar system that would have cost you $21,000 before incentives in cash, could instead cost as much as $35,000 with a solar loan because of dealer fees. 

    But don't worry, your electric bill savings with solar will be worth more than what you spent on the system, even with dealer fees. Don’t believe us? You can use our solar panel calculator to figure out your potential solar savings based on different interest rates. 

    How to qualify for a Sunlight Financial loan

    Sunlight Financial does have a few requirements in order for you to qualify for one of their loans:

    • At least one of the borrowers on the loan must be on the title for the property
    • A minimum of $10,000 must be taken out for the installation of residential solar systems
    • Must have a credit score of at least 650 and a debt-to-income ratio of 55% or lower for loans up to $70,000, or a credit score of at least 700 for loans up to $100,000

    You can do a pre-qualifying check to make sure that you meet Sunlight’s requirements. The pre-qualifying check doesn’t use a hard credit pull so you don’t have to worry about it hurting your credit score. 

    If your debt-to-income ratio is too high, you can add a second borrower onto the loan. The second borrower must still meet the credit requirements. 

    What projects can you use Sunlight Financial loans for?

    Sunlight Financial offers solar loans and home improvement loans. Their solar loans can cover any costs related to the installation of a solar system, solar battery, and any related roofing work that needs to be done to complete a solar project. 

    Home improvement loans from Sunlight Financial can be used to finance roofing, HVAC, window, fencing, decking, and patio projects. They also have loans that cover home automation and energy efficiency upgrades

    Is financing with Sunlight Financial a good idea?

    We’re not going to lie to you - there are some unfavorable customer reviews of Sunlight Financial on Facebook and the Better Business Bureau website. But, their 4.5 star rating with over 2,000 reviews on Google, plus their overall reputation of being one of the most trusted financing companies in the solar industry, tells us that using Sunlight Financial is probably a good choice if you need a loan

    Keep in mind that installing solar with Sunlight Financial will be more expensive than buying with cash. If you can, select a Sunlight loan with a shorter term period. You may have to pay higher monthly payments, but you’ll pay off the loan faster and maximize your overall 25-year solar savings. 

    Other types of loans, like home equity loans or home equity lines of credit, might cost a little less than using a financing company like Sunlight. However, these types of loans use your home as collateral and it might take longer to secure financing. You can read more about solar loan options in our complete guide to solar loans

    Of course, the best way to pay for your solar system depends on your specific circumstances. Your solar installer will be able to help you explore what financing options will work best for you. Get a better understanding of what costs and savings to expect when installing solar panels on your exact roof and find reputable local solar installers with our solar calculator below.

    Find out how much you can save monthly by switching to solar
     - Author of Solar Reviews

    Catherine Lane

    SolarReviews Blog Author

    Catherine is a researcher and content specialist at SolarReviews. She has strong interests in issues related to climate and sustainability which led her to pursue a degree in environmental science at Ramapo College of New Jersey.

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