Personal Loans

Can I Use a Personal Loan for Solar Panels in 2023?

Explore your options for unsecured solar loans, also known as personal loans. Learn advantages of personal loans to make solar energy affordable and accessible.
Two workers are seen installing solar panels on a building

Whether you want to reduce your carbon footprint or reduce your monthly bills, installing solar panels can be a smart choice. There are more than a million solar installations across the country, according to the U.S. Department of Energy, and this form of renewable energy can be used anywhere.

If you’re intrigued by the idea of helping the environment while also saving on energy costs, keep reading to learn more about solar panels, how much you pay for them, if you can use a personal loan for solar panels, and other ways to purchase them.

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What’s So Good About Solar Panels?

The benefits of solar panels fall into two categories:


While there is an upfront cost to solar panels, homeowners can save $10,000 to $30,000 off their energy bills over the course of a system’s lifetime. That’s according to EnergySage, an online solar marketplace that has partners including the U.S. Department of Energy and regional energy companies.


Solar energy is considered clean energy because it does not emit air pollution or greenhouse gases. While manufacturing solar panels can require additional energy, systems usually create enough electricity to offset the amount used in their creation within one to four years, according to the U.S. Energy Information Administration.

Although the actual benefits of solar panels may depend on your location and the system installed, many experts and homeowners agree that adding solar panels to your home can be worth the initial expense.

Compare rates, terms, and more, and find a personal loan for solar panels today.

Unsecured Loans for Solar Panels

Of all the ways to finance the purchase of solar panels, an unsecured loan may be the easiest and most flexible method. These loans don’t require any collateral, won’t put a lien on your home, and can often be applied for in minutes.

Here are our top picks for where to get an unsecured personal loan to pay for solar panels.

Best Egg: Best for Quick Funding

Why we chose it: If you want to start your project quickly, Best Egg is known for quickly distributing loan funds.

You can check your eligibility without affecting your credit score, and with their fixed rates, you don’t have to worry about your loan payments increasing in the future.

Best Egg Pros and Cons

Loan amounts: $2,000 – $50,000

Fees: Origination fee of 0.99% – 8.99% of loan amount

Terms: 3 or 5 years

SoFi: Best for No Fees

Why we chose it: For a fee-free option, check out the personal loans offered by SoFi.

The company boasts an easy application process and distributes money on the same day in most cases.

If you lose your job, SoFi’s unemployment protection will modify payments until you get back into the workforce.

SoFi Pros and Cons

Loan amounts: $2,000 – $50,000

Fees: No fees

Terms: 2-7 years

LightStream: Best for Consistently High Rates

Why we chose it: LightStream has some of the best rates available for unsecured loans although you’ll need to have great credit to be approved. Applications are processed quickly, and you could receive funds on the same day your loan is finalized. There are no fees with LightStream either.

LightStream Pros and Cons

Loan amounts: $5,000 – $100,000

Fees: No fees

Terms: 2 -12 years

Upgrade: Best for Transparency

Why we chose it: Upgrade gets high marks for its transparency. It clearly lays out repayment options so you can compare monthly costs with different loan options and make the right choice for your budget. The company also lets you check your loan eligibility without any impact on your credit.

Upgrade Pros and Cons

Loan amounts: $1,000 – $50,000

Fees: Origination fee of 1.85% – 8% of the loan amount

Terms: 2 – 7 years

ezSolar Loans: Best for Flexibility

Why we chose it: There are three lending options available through ezSolar Loans, and its fixed-rate term solar loan features low APRs and longer repayment terms. You’ll need to work with an approved solar installer, and funds will be sent directly to that contractor. This makes paying for your project hassle-free.

ezSolar Loans Pros and Cons

Loan amounts: $10,000 – $100,000

Fees: No loan origination fee but a lien on the solar equipment can result in a $100-$300 fee being rolled into the project cost.

Terms: 12, 15, or 20 years

How to Get an Unsecured Loan for Solar Panels

The application process for many unsecured loans is very simple, but before you submit anything, follow these steps.

Check Interest Rates

Interest rates for unsecured loans can vary widely, with some charging as little as 5.99% and others as much as 35.99%. Obviously, the lower the interest rate, the lower your loan costs.

Most lenders advertise a range of rates. The lower rates are for those with excellent credit while those with lower credit scores may pay more interest.

Check Your Credit Score

Checking your credit score can help you determine what type of rate you can expect to receive. Scores of about 670 are considered good but having a score higher than 700 is likely to improve your chances of receiving a lower interest rate.

Many banks and credit card companies, such as Discover, offer their customers free access to credit scores. Otherwise, you can use a free service like CreditWise from Capital One to check your score.

If your score is low, it might be a good idea to spend a few months working to improve it before applying for an unsecured loan. Timely payments and paying down debt are two good ways to boost a score.

Compare Loans

Once you think you’re ready to apply, it’s time to take a closer look at various lenders. You’ll want to look for the following:


Some loans have origination fees. This is a fee intended to cover a lender’s cost to process your application and extend the loan. It is usually deducted from your loan amount rather than paid out of pocket. Lenders might have other fees as well, such as pre-payment penalties.


The term is how long it will take you to pay off a loan. A short-term means you’ll be out of debt faster, but your monthly payments will be higher. If you need to borrow a large amount, a longer term may make payments more affordable.

Interest rates

Again, you won’t know your exact interest rate until you get to the next step, but a lender should have a range available on its website.

Get Prequalified

Many lenders now offer prequalification. This means they can look at your financial picture without negatively affecting your credit score. In this way, you can learn what your specific interest rate might be.

Many lenders have a “check my rate” option that serves the same purpose as prequalification. To get your rate, you may need to provide the following:

  • Contact information
  • Annual income
  • Homeownership status
  • Employment status
  • Social Security number

However, the prequalification process can vary by lender

Finalize Application

After you are satisfied that you have found the best loan for your solar panel installation, it is time to finalize your application and submit additional information. This may include documents to verify income or assets.

A lender will also ask for information regarding where you’d like the loan proceeds deposited. In some cases, you could have money in your bank account by the end of the day after approval.

Benefits of Solar Panels

As mentioned above, there are both financial and environmental benefits to solar panels. For instance, installing solar panels at your home could mean you get the following:

Tax Credits

The federal government offers a tax credit equal to 30% of the cost of qualified solar power equipment, according to TurboTax. The credit may apply to storage equipment and some installation costs as well.

Check with your accountant or tax preparer for more details. There may also be state tax incentives available.

Lower Energy Costs

Energy savings due to solar panels will vary depending on the type of equipment installed, your geographic location, and the cost of energy in your area. However, EnergySage estimates 20-year savings to range from $9,748 in Washington state to $34,056 in Massachusetts.

Enhanced Home Value

When it comes time to sell your home, having solar panels installed could help up its price.

Nationwide, homes with solar panels sell for 4.1% more than comparable properties, according to 2019 research from the real estate website Zillow. That translates into an extra $9,274 for a median-priced home.

Less Impact on the Environment

Overall, the U.S. solar industry has the same impact on carbon in the atmosphere as 2 billion trees, the Solar Energy Industries Association says.

EnergySage notes that a 6kW solar panel system could be expected to reduce carbon emissions by 6.3 metric tons per year, which exceeds the annual emissions of a typical vehicle that runs on fossil fuels.

However, the benefit of your home’s solar panels will, again, depend on where you live and the source of the energy it is replacing.

Drawbacks of Solar

The main drawback to solar power is the initial cost. You can expect to pay between $3-$5 per watt for a residential solar energy system, according to the Center for Sustainable Energy. That equates to $15,000 – $20,000 for a 5kW system.

But don’t forget that there are federal, and maybe even state, tax credits available that could reduce out-of-pocket costs. Once those credits are calculated, the cost of a 5kW system could drop to $10,592, according to the Solar Action Alliance.

That cost is broken down into the following:

  • Operational expenses related to design, permits, and connections: 45%
  • Solar panels: 25%
  • Inverter: 10%
  • Installation: 10%
  • Balancing of the system: 10%

More Ways to Finance Solar

While an unsecured personal loan can be a quick and convenient way to finance solar panels, it is not your only option.

Here are some other solar panel loan choices:

In-House Financing

Some solar panel installation companies offer their own financing.

These loans can be convenient since you are doing everything through one company.

That eliminates the need to receive funds from a loan and then pay the installer. A drawback to these loans is that you may end up paying more interest than you would elsewhere.

Home Equity Loan

A home equity loan is a line of credit taken out against the value of your house.

These loans are flexible and, depending on the lender, money may be accessed via a debit card, check, or direct deposit to your bank account.

In this way, you can borrow exactly what you need and not a dollar more.

However, the process for applying for a home equity loan is significantly more involved than that of a personal loan.

Cash-Out Refinance

If you have enough equity in your home, you could refinance your mortgage and walk away with cash at closing.

Known as a cash-out refinance, these loans have tax benefits, such as deducting interest on your itemized federal income tax returns.

However, with interest rates rising now, these loans have become less attractive.

Frequently Asked Questions

Can I get a personal loan for solar panels?

Yes, a personal loan can generally be used for any purpose, including the purchase and installation of solar panels. These loans typically have simple applications, competitive rates, and a variety of repayment options. Some may even pay out funds on the same day an application is finalized.

Do solar loans hurt your credit?

Like any other loan, money borrowed for solar panels will show up on your credit report. That means the balance owed and your payment history will be factored into your credit score.

Missing payments could hurt your score, but if you make your payments on time and steadily pay down the balance, you may find the loan actually helps improve your credit history.

Is it better to pay cash or finance solar?

Arguments can be made for both approaches. Paying cash can be cheaper in the long run because you aren’t paying interest.

However, if that means wiping out your savings, it could leave you in a precarious position financially should an emergency arise. Financing with a fixed rate provides for predictable payments and lets you preserve your cash reserves.

How do I find an installer?

An internet search is one way to find a solar panel installer in your area.

These professionals, also known as photovoltaic installers, can be certified through the North American Board of Certified Energy Practitioners. The NABCEP recommends using a site like to find local installers.

How can I figure out how many panels I need on my house?

You can use a calculator on to determine what system is adequate for your needs and region.

Generally speaking, though, you can do the calculation by multiplying your hourly energy needs by the peak sunlight hours in your area and then dividing the answer by a panel’s wattage, according to solar company SunPower.

Don’t overlook the fact that panels can be heavy so ensure your roof can structurally handle the extra weight.