Path-Q Solar

What loan fees should be included when comparing financed solar offers?

Answer

Compare the total cost of each loan, not just the advertised interest rate or monthly payment. Include origination or dealer fees, application or processing charges, lender or closing costs, required points, account or servicing fees, late-payment charges, prepayment terms, and any fee added to the financed balance.

Key points

  • Ask whether any lender or dealer fee is deducted from the project proceeds or added to the loan principal.
  • Compare APR, total amount repaid, term, payment schedule, and any early-payoff restrictions.
  • Check whether optional products such as insurance, maintenance, or warranties are bundled into the financing.

What it depends on

  • Loan principal and term
  • Interest rate and APR
  • Dealer, lender, and closing fees
  • Whether fees are paid upfront or financed
  • Prepayment and late-payment terms

Risks and trade-offs

  • A low stated rate can be offset by a large upfront or dealer fee.
  • Financing fees increase the amount on which interest may accrue.
  • A longer term can reduce the monthly payment while increasing total repayment.

Information you may need

  • A complete loan estimate or finance disclosure for each offer
  • The cash price of the solar project before financing charges
  • The total amount financed and total amount repaid

Your next step

What to do next

Create a side-by-side comparison using the same project price, term, and assumptions, and include every fee in the total repayment.

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