When a boiler breakdown occurs and a full boiler replacement is required, the large upfront cost of anywhere between £1,500 and £3,000 can be a big concern to many, however, there is now a range of options available to spread the cost.
This article will explore the finance options available, the borrowing criteria and checks required to obtain finance, as well as the typical costs and companies that offer finance.
What is Boiler Finance?
Boiler finances is a method of payment that enables the cost of a new boiler to be spread into more management monthly repayments. The finance terms available will vary between company’s and also may be impacted by your credit score, however, there are a range of choices available on the market from zero deposit, no interest and spreading the cost from anywhere between 2 and 10 years, providing a wide range of choice depending on the buyer’s circumstances.
Often, the minimum loan that lenders will offer is £1,000. This can sometimes cover the entire new boiler, or part of the install cost, with the borrower paying a deposit.
What can Boiler Finance Cover?
Typically boiler finance can cover the entire install costs of a new boiler including; the boiler itself, the installation fees, a new flue and boiler controls such as a thermostat. A warranty for the boiler will also be included however the duration will vary depending on the boiler manufacturer chosen and whether or not an extension is available or offered.
In addition, depending on the installer, other services may be included with a new boiler installation such as filters and chemical cleanses to the existing heating system.
It is important to note that the service of the installer or the quality of the boiler will not be impacted by the method of payment. The warranty for the boiler will also be the same, no matter the source of payment.
What are the Eligibility Criteria for Boiler Finance?
There are often age restrictions applied to boiler finance, as most companies will only offer loans to those between 18 years and 85 years. There will be other checks such as that the applicant has resided within the UK for at least 3 years and has a form of income to be able to meet the repayments.
Like most finance applications, a standard credit check will usually be required in order to obtain finance for a new boiler. This will require ID being checked to guarantee the applicant’s identity.
If you have a bad credit history, there may still be options such as approaching other lenders, however, the interest rates offered are likely to be higher due to the risks involved.
What are the Typical Deposits for Boiler Finance?
Often, as long as the buyer meets the lending criteria for boiler finance, they can choose the deposit level that is most suitable for their circumstances. Typically deposits range from paying nothing upfront, to up to 50% of the loan amount. If a borrower can fund a large deposit, this will often reduce the monthly instalments dramatically.
What Repayment Periods are Available?
As discussed, often the borrower can choose the most suitable repayment period for their circumstances, usually between 2 and 10 years. However, it is worth bearing in mind that should a longer repayment period be chosen this will often lower the monthly payments, but more interest will be payable over the term of the loan.
What are the Typical Monthly Repayments for Boiler Finance?
The monthly repayments in relation to the purchase of a boiler will vary depending on:
- The level of deposit chosen to pay upfront
- The repayment period chosen
- The interest rate
As a rough estimate, a new boiler installation could cost around £17-20 per month when paid via boiler finance.
Which Companies Offer Finance?
Many companies offer boiler finance, however, the prices of the boiler and installation will vary between them, as do the terms that the companies can offer. It is often found that the larger companies can be more expensive due to the large overheads that need to be covered, whereas online providers can work out the cheapest.
The online market for boilers has expanded over recent years, offering very competitive pricing for top brand boilers.
Some companies offer finance direct to customers, whereas other companies use third parties to supply the finance to their customers such as BOXT who offer a finance solution through their partnered company Divido, allowing eligible customers to spread the cost of a new boiler and the installation.
Another example is Heatable, who in addition to offering low boiler prices, also can offer no interest on new boiler installations for a 24-month period, which is very attractive as many competitors commonly cap no interest deals for a year only.
Benefits of a New Boiler Installation
There’s no getting around it, a new boiler installation is an expensive purchase, however, there are benefits to installing a new boiler including increased energy efficiency which in turn should reduce the household energy bills. Also, a new boiler will come with a warranty to provide peace of mind that the parts are covered should any breakdowns occur.
The Process of Buying a Boiler on Finance
The process of buying a boiler on finance is simple, hassle-free and convenient. Quotes can be obtained very quickly and easily online either from manufacturers directly, via large heating companies such as British Gas or via online boiler suppliers such as Heatable, Boiler Central or BOXT.
It is highly recommended that a number of quotes are obtained to ensure that good value is being provided and that the offerings can be compared; both in terms of the service provided as part of the installation plus the differing finance terms.
One benefit of comparing quotes online is that there are no pushy salespeople to pressurise making any rash decisions and that time can be taken to compare quotes.
Boilers on finance summary
Purchasing items on finance is now a common practice, and boilers are no different. There are many companies offering finance on boilers including the installation costs which have helped to drive down prices, especially online as well as offering competitive finance terms.
In addition to the funding method, the entire process of ordering a boiler and arranging an installation has been modernised and simplified, enabling homeowners with little technical knowledge of boilers to be self-sufficient to obtain quotes, compare prices and book a fitting at a convenient time.
All of the above have given homeowners more options when a stressful boiler breakdown, turns into a large bill for a replacement boiler!