If you are considering buying a new air conditioning and heating system or heat pump, and are not able to pay for it with cash, check or credit card, then you will likely run across a financing offer called “same as cash financing”. It is usually preceded by a number of days or months (example: “90 days Same As Cash”) and is also abbreviated SAC.
Having had an eye-opening experience myself with a computer purchase and this topic, research for this blog reinforced my beliefs in this area. I’ll also include a list of questions to ask about SAC offers, along with a financing alternative you may not have thought of or been told about.
Read the “same as cash” SAC documents and ask questions
The first thing to know about SAC: there are usually strict requirements to avoid changes in the “no interest”. For some offers, if you are late on any payments or fail to pay the entire balance on or before the due date, the whole loan can be recalculated back to the first day it began, and at some unbelievably high interest rates or with fees. If that happens, what started out seeming like “interest free money” for your AC purchase can turn on you to become something you would regret. Now…on to the checklist….
As a checklist while you are reading SAC financing details, look for the following:
- How many payments must you miss or be late on before the SAC offer turns to a loan with interest?
- If interest were to get added, what would the interest rate be in APR?
- If the rate escalates, is it recalculated back to the first or the day your loan became late?
- What date or system determines when your payment was received? (In other words, how many days could pass between the date your payment is delivered at one part of their payment center and the date your payment is actually credited to your account?)
- Is there any credit insurance /debt cancellation insurance required or automatically included?
- If present in the contract, can you opt out of it? (This type of insurance usually costs a lot, relative to the size of the loan).
While reading in some HVAC industry publications, I found references to credit unions, and this is a topic we have written about before. If you project into the future and believe you may not be able to pay off the entire SAC loan, you should consider a fixed rate home improvement loan from your local credit union. You can search online or look up credit unions in your area at NCUA – Credit Union Directory
In the past few years, there are more credit unions that have membership criteria other than employment for a specific company or entity. One way to describe these is “community chartered credit unions”. Practically speaking, it is probably easier to just ask what the membership requirements for your credit unions are.
If you have related experiences, please send them so other readers can benefit.