5 Ways to finance your smart home system
We’ve never shied away from discussing the cost of building a smarter home. It can be costly, especially if you don’t have clarity on your requirements. However, we’ve yet to cover how to finance your smart home system.
There are several ways you can raise the money to pay for a home automation system:
- Pay cash
- Use a credit card
- Take out a personal loan
- Ask the retailer/manufacturer for a payment plan
- Use a home equity loan.
Regardless of how you fund your system, research the market and compare the terms and interest rates of different financing options before you make a decision.
Let’s explore these options and help you find the best way to finance your smart home system.
If you have the funds, paying cash for your smart home system can be a good option. Plus, it will prevent you from incurring any additional debt.
Using cash to fund your smart home system means:
- You don’t have to worry about paying interest on a loan or credit card balance
- No monthly payments. So, you can budget your money more effectively
- Some retailers or manufacturers may offer discounts for customers who pay cash.
As a significant investment, using cash to finance your smart home system shouldn’t be a decision you rush. Ensure you have the budget and are in a sound financial situation before making a decision.
If you don’t have the funds available to pay cash, you may want to consider financing options such as a personal loan or credit card.
Use a credit card
Using a credit card to finance your smart home system can be a good option in some situations. Some advantages of using a credit card include:
- They are a convenient way to pay for large purchases because you can use them anywhere that accepts credit cards
- Some credit cards offer rewards or cashback for purchases made on the card
- You might be able to buy using an 0% interest promotion meaning you won’t have to pay any interest on the balance as long as you pay it off within a certain time frame (usually six to 18 months).
However, a personal loan typically has longer repayment terms than credit card balances meaning you may be paying off the loan for a longer time.
If you have a high interest rate on your credit card, it may be a more expensive option than using a personal loan or home equity loan.
Take out a personal loan
You might prefer to use a personal loan, particularly as there are many benefits, including:
- Fixed interest rate: Personal loans typically have a fixed interest rate, so you’ll know exactly how much you’ll be paying each month, making it easier to budget
- Fixed monthly payments: Personal loans also have fixed monthly payments, so you’ll know exactly how much you’ll be paying each month
- As personal loans are unsecured, you don’t need to put up any collateral (such as your home) to secure the loan
- Potential for lower interest rates: Personal loans may have lower interest rates than credit cards, especially if you have good credit.
However, there are a few drawbacks to using a personal loan to finance a smart home system. They typically have longer repayment terms than credit card balances meaning you may be paying off the loan for a longer time.
You might also need to pay fees to take out a personal loan. So, ensure you carefully read the loan’s terms and work the monthly cost into your budget before deciding to finance your smart home system with a personal loan.
Ask the dealer or manufacturer for finance
If you’re looking at spending a 5-figure sum on Control4 or Crestron, for example, you might be able to ask the dealer to finance your purchase and allow you to spread the cost over several months.
Some advantages of using the dealer or manufacturer to fund your system include:
- It can be a convenient way to pay for your smart home system because you can do everything in one place.
- Some dealers/manufacturers may offer special financing options or promotions for smart home systems. These financing options may have lower interest rates or better terms, so make the process more affordable.
- Some dealers or manufacturers may offer discounts on products or services for using them as a lender.
However, you might find that these financing options may have hidden fees or less favourable terms than other options. So carefully compare the terms and interest rates of different financing options before deciding.
Use a home equity loan
If you have equity, you might be able to borrow against it with a home equity loan. Some of the advantages include:
- As secured loans, they typically have lower interest rates
- You’ll pay fixed monthly payments allowing you to budget and know exactly how much you’ll be paying each month.
Be aware, home equity loans are secured by the equity in your home. If you default on the loan, your home could be repossessed. You might have to pay additional fees to set up the loan. So it’s worth carefully considering the loan’s terms before deciding on this option.
That’s how to finance your smart home system
Regardless of the option you choose, you should research the market and compare the terms and interest rates of different financing options before making a decision.
It might be best to save up at least part of the money you require and get a smaller loan than borrow the whole amount.
However, if you’re set on Crestron, Savant, or Control4, you might need a loan or dealer finance to help you spread the cost and make it easy for you to purchase the system.