Best green loans of 2024

A home with solar panels on the roof.Image: A home with solar panels on the roof.

In a Nutshell

If you’re looking at improving your home’s energy efficiency, a green loan might help you accomplish your goals. A form of personal loan, some green loans may allow you to borrow up to $100,000 to finance projects like installing solar panels, triple-pane windows or a new geothermal heat pump system.
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If you’re researching how to finance home energy efficiency improvements, green loans may allow you to spread costs over several years.

You may also get a lower interest rate with a green-specific loan than you’d get with a traditional personal loan. Here are our picks for the five best green loans available nationwide.

Best for longer loan terms: Clean Energy Credit Union

Why Clean Energy Credit Union stands out: Clean Energy Credit Union offers green loans for projects that improve energy efficiency, such as installing geothermal heat pump systems, putting in solar panels, replacing insulation or purchasing an updated energy-efficient HVAC system. Depending on the type of project you’re planning, you can have up to 20 years to repay your debt, giving you a smaller monthly payment.

  • Loan types: Clean Energy Credit Union gives you the option to apply for a secured loan,  using your savings or CD account as collateral.
  • Loan amounts: The maximum amount you can borrow depends on what you want to use the loan for. Clean Energy Credit Union’s loan amounts typically range from $3,000 to $90,000.
  • Membership eligibility: To qualify for a loan, you must be a member. To join Clean Energy Credit Union, you must belong to one of its partner organizations. Some of those organizations have open memberships that you can join for as little as $10. 
  • Loan uses: Loans may only be used for eligible green projects and services. Other home improvement projects don’t qualify for Clean Energy Credit Union loans. 

Best for fast funding: LightStream

Why LightStream stands out: If you have a project that you need to pay for quickly, LightStream might be a good option because you may be able to receive your money as soon as the same day you apply. Some personal loan lenders can take several days to disburse your funds after approving your application.

  • Large loan amounts: With LightStream, you may be able to borrow up to $100,000.
  • Variety of loan terms: LightStream’s loan terms can be as long as 12 years for home improvement, solar or energy efficiency projects.
  • Autopay discount: LightStream offers a 0.5% autopay discount, but you must apply for this before your loan is funded.
  • Fees: LightStream doesn’t charge origination fees, late fees or prepayment penalties.

Read reviews of LightStream personal loans to learn more.

Best for co-signers: LendingClub

Why LendingClub stands out: LendingClub lets you apply with a co-borrower, so if you don’t have great credit and want to increase your odds of qualifying for a loan and getting a more competitive interest rate, you might want to consider this lender.

  • Loan amounts: With Lending Club, you may borrow up to $40,000 with a home improvement loan for things like solar, water efficiency upgrades and energy-efficient doors or windows.
  • Loan terms: LendingClub offers loan terms between 24 and 60 months.
  • Origination fees: LendingClub charges an origination fee — it’s 3% to 8% of your loan amount, and it’s deducted from your funds when it’s disbursed.

Read reviews of LendingClub personal loans to learn more.

Fast Fact

How much does it cost to install a solar electric system?

A residential solar system may cost about the same as buying a new midsize car. Your cost depends on several factors, including the size of the system you need, your location, labor costs and local permitting costs. You may be able to reduce the total price if you’re eligible for federal or state tax credits, deductions or incentive programs.

Best for large loan amounts: SoFi

Why SoFi stands out: Sofi doesn’t market personal loans specifically for green projects — but its home improvement loans come in amounts up to $100,000. And if you have multiple renovations planned, such as installing new windows and purchasing energy-efficient appliances, you may need a large loan. Some lenders have caps of $35,000 or less.

  • Loan amounts: SoFi offers personal loans ranging from $5,000 to $100,000. 
  • Loan terms: SoFi offers personal loan term between two and seven years. 
  • Prequalification: You can get a rate quote from SoFi without a hard credit inquiry. But keep in mind that if you apply officially, you may face a hard inquiry that can have a small impact on your credit.
  • Fees: SoFi doesn’t charge late fees or prepayment penalties, but it charges origination fees between 0% and 7%.
  • Co-applicants: If you want to improve your chances of getting a loan or qualifying for a lower interest rate, you can apply for a SoFi loan with a co-applicant who’s jointly responsible for the loan. Your co-applicant must live at the same address as you to be allowed to sign the loan agreement.

Read reviews of SoFi personal loans to learn more.

Best for less-than-perfect credit: Upstart

Why Upstart stands out: If your credit isn’t strong, qualifying for a loan may be more difficult. With Upstart, you can apply for a home improvement loan (for work including green-energy upgrades) using alternative loan approval guidelines.

  • Loan amounts: Upstart offers personal loans between $1,000 and $50,000 (loan amounts may vary by state) for home improvement projects.
  • Loan terms: Upstart offers loan term of either three or five years.
  • Prequalification: You can check your rates for green loans without affecting your credit scores. Just remember, prequalification is an estimate of terms — it doesn’t guarantee your rate or approval. Your final loan approval and terms may be different after you complete the full application process.
  • Fees: Before applying for a loan, be aware that Upstart may charge origination fees (a percentage of the loan amount, from 0% to 12%) and Upstart will deduct the fee from the loan proceeds before disbursing the money to you.
  • Disbursement: Upstart says most borrowers will receive their money quickly after approval.

Read reviews of Upstart personal loans to learn more.

What you should know about green loans

Improving your home’s energy efficiency may help you use up to 20% to 30% less water or energy and increase your energy savings, but there are some considerations to remember.

Tax credits

There may be tax credits offered in a given tax year as incentives for energy-efficient improvements, but these may only offset a portion of your cost.

If you qualify for a credit, it may reduce how much you owe in federal income taxes — but you’ll need to consult the current tax year’s rules (published by the IRS) to learn what’s possible.

Alternatives to green loans

You may also want to consider a home equity loan, home equity line of credit (HELOC) or cash-out refinance loan to finance green projects. But take note: There’s risk in secured-borrowing options – because you use your property as collateral, you could lose your home if you default.

Interest rates and terms vary

Depending on the lender, you could borrow up to $100,000 and have up to 20 years to repay a loan. Before applying, keep the following things in mind:

  • Credit checks: When you apply for any personal loan, including green loans, lenders will check your credit. When the lender conducts a hard credit inquiry, it can affect your credit scores.
  • Interest rates may be high: The lowest rates typically go to people with excellent credit. If your credit isn’t great, your interest rate may be much higher. Many lenders offer interest rates in the double digits.
  • Not all lenders offer long loan terms: While some lenders offer repayment terms up to 20 years, not all lenders have those options. With some, the longest term is just five years, which would mean a higher monthly payment.
  • Origination fees: Make sure you read the fine print. Some lenders charge origination fees that can be as high as 12% of your loan amount.

As with any debt, make sure you carefully weigh the pros and cons of green loans before making a decision.

How we picked these loans

To identify the best green loan lenders, we looked at major banks, credit unions and online lenders that work with borrowers nationwide. We evaluated 20 lenders based on their available personal loan options, loan amounts, terms, interest rates, typical disbursement times and borrower criteria to select these lenders.

About the author: Kat Tretina is a personal finance writer with a master’s degree in communication studies from West Chester University of Pennsylvania. Obsessed with her many side hustles, she focuses on helping people pay down their … Read more.