Green Loan Options

Are you looking for more environmental-friendly loan options? Have you considered investing in a green loan? Read more about green mortgages and their benefits at Financer.com!

Compare personal loans here!

Sources of Green Loans

Green loans were first introduced as a government initiative specifically designed to encourage individuals to make more energy-saving improvements on their home. It is also designed for businesses who want to go green by implementing eco-friendly products and services.

Commercial lenders or peer lending from groups of private individuals are the main sources for obtaining green loans. Home renovation projects that qualify for a green loan include composting, recycling, double glazing, janitorial uses of eco-friendly products, and maintenance of community gardens.

Green LoanWhat is a Green Loan?

In 2016, Lloyds Banking Group launched an initiative known as a green loan to support clients reducing CO2 emissions. The scheme was a loan which allowed a borrower to spread the costs of improvements over a period of 10-25 years.

One of the main ways a green loan differs from a standard loan is that repayments are added to your electricity bill. Lenders abide by the ‘golden rule,’ which states that the cost of the loan should not surpass the cost of energy saved.

Green loans can be used for home remodeling, to purchase and install solar panels, or for roofing costs. Green landscaping, which focuses only on utilizing your own aesthetic land without using hazardous chemicals, also qualifies for this kind of loan.

In the case of peer to peer lending, green loans may come from individual investors. You may receive a loan for a large amount from one person or small amounts from various people. There is a fixed rate and credit history is considered a factor in the loan determination. Peer lending has more flexible terms than traditional lending.

Green Lending in Mortgages

There have been many interpretations when it comes to answering the question: What is a Green loan? One widely accepted definition of a Green loan is that it is essentially lending, which is subject to certain environmental criteria. As such, lenders may look to assess a borrower’s sustainability strategy in real estate collateral.

Individuals can now obtain Green Loans now called ‘green mortgages.’ The Ecology Building Society now offers green mortgages to borrowers on projects that are built or renovated with environmental factors in mind.

Green mortgage borrowers receive a 1% discount on the mortgage rate for an existing home and up to a 1.25% discount for new construction.

Contents of A Green Loan Agreement

There should be sustainability covenants that a borrower should commit to in the green mortgage agreements, such as:

  • Reducing energy intensity in their buildings
  • Managing the buildings more efficiently
  • Engaging tenants on sustainable practices
  • Providing energy performance data

Lenders of the year

We would like to highlight the most popular lenders. These are the most trusted and highly rated loan companies based on customers reviews.

Compare all lenders

Stay in Touch with Financer.com

Follow Us on Facebook

Boost your personal economy

Receive tips and hacks for your personal economy - stay up to date with the finance in the world.