Green loans in Australia – Reward yourself and the planet
There’s a lot of goodness in going green. It’s how you shrink your carbon footprint and energy costs. Green loans add a bit more to that goodness with low interest rates and special discounts for an even happier wallet. If this is all the motivation you need to finance your next eco-friendly project, check out what you need to know about getting a green personal loan in Australia.
What’s a green personal loan?
A green loan is a personal loan with an environmentally friendly attitude. While regular personal loans have many uses like weddings, holidays, or debt consolidation, a green loan only pays for projects with clear benefits for the environment.
“Going green” is an initiative that governments and even lenders applaud. Therefore, you’ll find that most green loans offer competitive interest rates and discounts than traditional personal loans and credit cards. However, besides cheaper borrowing costs, a green loan has all the familiar workings of a regular personal loan:
- Loan amounts. A green loan generally allows you to fund sustainability projects worth between $2,000 and $100,000. Therefore, you can switch to an eco-friendly and energy-saving lifestyle without paying full upfront costs. Additionally, when it comes to protecting the environment, sooner is always better than later and a green personal loan helps you skip the savings queue.
- Loan terms. Repayment periods for green loans are also flexible. Depending on amount and preference, you can pay off the lump sum together with interest and fees over 1 to 7 years. Again, going green becomes affordable when you only have to pay a bit at a time instead of making a much bigger one-off payment.
How a green loan can help you
As mentioned earlier, green loans are only fit to cover approved eco-friendly products, home improvements and purchases. This may include:
- Energy efficient appliances that meet the minimum star rating requirements
- Energy efficient air conditioners
- LED lighting
- Double glazed windows
- Outdoor or external awnings
- Rainwater tanks
- Grey water treatment systems
- Wind turbines
- Vehicles with low carbon dioxide emissions
Keep in mind that because green loans are governed by strict standards, not all products or projects with a green theme will qualify. Generally, lenders will need documented proof to ensure the money is being used for the right cause. If you’re unable to get a green loan, you can still get the ball rolling by applying for a low-rate personal loan.
What are solar loans?
A solar loan is a type of green personal loan that pays for:
- Rooftop solar panels
- Solar hot water heaters
- Solar pool heaters
- Battery storage systems
More and more Aussies are getting off the grid, with rooftop solar installations being a particularly favourite way to do so. Going solar isn’t just a green thing to do; it also trims your energy bills, gives you access to government grants and boosts your property’s value.
Top green personal loans in Australia
There are plenty of green loan providers in Australia, and here are just a few to point you in the right direction:
- Bendigo Bank. Bendigo Bank’s secured green personal loan is handy for buying “A” rated vehicles that emit below 130g of CO2 per km. Its green unsecured loan is ideal for solar power systems, energy saving white goods, as well as other green initiatives.
- Bank First. When choosing a Bank First green personal loan, you can talk to their lending specialists. They help you choose the best option for your unique needs and guide you through the buying process. The funds cover many eco-friendly uses and come with advantages such as a redraw facility.
- Community First Credit Union. You can apply for both solar and green loans to enjoy low rates, fewer fees, and great features.
- Hunter United. This lender offers a Green Saver loan to help turn your home green. It’s suitable for solar installations and sustainable home improvements such as insulation.
- Australian Military Bank. You can get unsecured funds for approved clean energy products that have to do with energy, hot water, battery storage, recycling, and water capture, as well as other things.
- Police Bank. As a member, a Police Bank green loan rewards you for chipping in to protect the environment. You get a special low interest rate as long as you’re financing solar water hot systems, green vehicles, rainwater tanks, and similar environmentally friendly products.
Comparing green loans and solar loans to find the best one
With enough green loan providers to go around, it’s best to consider the following features to find the best option for your circumstances:
- Interest rates. A variable rate might offer more savings while a fixed rate provides the security of unchanging repayments. In any case, look out for the lowest rates available for each loan type.
- Fees and charges. Fees also increase the overall cost of the loan. Compare the interest rate and comparison rate for each option. The difference will tell you whether the offer has fewer or steeper fees.
- Loan limits. This applies to how much you can borrow, available terms, and approved uses. Make sure the offer ticks as many boxes as possible for your budget and needs.
- Repayment flexibility. Common indicators of flexibility include making extra repayments without penalty and opting for a repayment frequency (weekly, fortnightly, or monthly) that suits your needs.
- Secured vs unsecured personal loan. Decide if you want the even lower rates of a secured loan or a collateral-free deal that won’t put your assets at risk.
Green personal loans in Australia FAQ
Do I qualify for a green loan?
This depends on the lender, but the minimum requirements state that you must be at least 18 years old, and an Australian citizen with a steady income. You must also be financing a green project or product.
How do I apply?
Once you have picked your best option, click “Go to Site” for a shortcut to the lender’s website and application page.
Is a green loan affordable?
The maths depends on your situation. Done properly, green initiatives reduce energy costs, and if you implement them sooner, you might get more value than waiting on your savings. While on the subject of affordability, make sure to use BestFind’s green loan calculator to find suitable repayment estimates for your budget.
What are green loan principles?
These are four principles that set the standards for what constitutes green finance. They look at the following:
- Use of funds
- Process for project evaluation and selection
- Management of funds
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