Want to clean your footprint on the planet?
Need financial support to do it?
Well, green loans are the solutions to it.
What are green loans?
A green loan is a type of a loan offered by a financial institution to a customer on the basis that they use that money for something the lender considers to be environmentally friendly.
Many of us talk about sustainable development these days to switch to an eco-friendly living. Whether you’re a slow starter or a rapid developer, eco-friendly living has a very high price tag. Ideally, we would save up to make the purchase outright. But if that isn’t an option and you would like to make an environmentally conscious change sooner, a product you could think about is green loan. And on average lenders are offering lower interest rates to consumers who want to put their credit towards green products. Therefore, we can say that green loans are loans provided by peer to peer lenders, banks and other financial institutes for the customer to make a purchase in a green product.
Green products include:
- Solar panels
- Battery packs
- Solar hot water systems
- Heat pump hot water systems
- Home ventilations
- Electric vehicle charging stations
Remember that solar panels and battery packs must be installed by a retailer or installer approved by the clean energy council. This helps ensure the chosen systems meet all relevant Australian standards.
Characteristics of green loans
- Green loans have lower interest rates while standard loans have higher interest rates. (starting from 0.99% fixed term per annum)
- Standard loans have higher application fees while it is the opposite in green loans.
- You can borrow up to $20,000
- Often loan term is 10 years
Eligibility criteria for green loans in Australia
- You must have a home loan or an investment loan with the financial institution you wish to proceed with.
- You must install solar panels or battery storage units by a Clean energy council approved solar installer (for the list of Clean energy council approved retailers follow this https://www.cleanenergycouncil.org.au/consumers/buying-solar/find-an-installer).
Finance institutes that offer green loans
All four major banks and most of the financial institutions as well as some non-lenders provide various types of green loans. Lending criteria, interest rate and loan terms vary from lender to lender.