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How a green loan could help you live more sustainably in 2022

How a green loan could help you live more sustainably in 2022

If reducing your carbon footprint is one of your new year’s resolutions, there’s no better time to start exploring your options.

Swapping out single-use plastics for reusable packaging and opting to buy slow fashion over fast are both respectable steps towards living more sustainably. But there are some changes you can make to where you live and what you drive that can have an ongoing effect on both the environment and your wallet.

While the cost of these different projects might range from a few hundred dollars up to tens of thousands of dollars, there is specialised finance available to eligible borrowers. A green loan – or in more specific circumstances, a green personal loan or green car loan – is a type of loan offered by lenders for the purpose of funding environmentally-friendly projects or purchases.

Green loans tend to have lower interest rates than standard personal loans, as lenders aim to incentivise borrowers to ‘go green’. If you don’t have the savings at hand to cover the cost of these purchases upfront, a green loan can allow you to go ahead with them now and reap the rewards (both morally and economically) sooner.

Here are just some of the ways a green loan could help you start the new year off more sustainably:

Rooftop solar installation

One way to reduce your carbon footprint and your electricity bills is to install rooftop solar panels at home. Rooftop solar is used to convert heat and light from the sun into electricity to generate power. Solar energy is an environmentally friendly alternative to other energy sources as it doesn’t produce greenhouse gases or other pollutants.

Rooftop solar allows you to generate your own electricity to power your home, typically reducing your quarterly power bills. Additionally, you could consider investing in a battery storage system to store excess power, which can be useful during periods of low light.

There are also a number of state and federal government rebates available to eligible homeowners who install rooftop solar. Depending on where you live, this could include rebates for solar panel installation, battery storage and low interest finance.

Energy efficient appliance upgrade

According to the Australian Government Department of Industry, Science, Energy and Resources, refrigerators and freezers account for 8 to 13 per cent of household energy bills.

So, if you’ve been hanging onto an old fridge with an abysmal energy rating, it could be time to consider an upgrade. Energy efficient white goods and appliances that meet minimum star ratings can be purchased with the help of a green personal loan. This includes air conditioners, washers and dryers, dishwashers, and televisions.

Plus, there’s the added bonus of a likely reduction in your energy usage and in turn, your electricity bill.

Electric vehicle purchase

New year, new car? If you’re in the market for a new set of wheels, you might be considering whether to choose a petrol, hybrid, or electric engine. With an increasing number of car manufacturers offering low emission vehicles, car buyers have more to choose from than ever before.

Driving a hybrid or electric vehicle reduces (or eliminates) the need to fill up with petrol. Environmental benefits aside, this could also save you cash on a regular basis. But keep in mind, an electric vehicle will need to be plugged in to be charged and installing a charging station at home will come at an additional cost.

Many lenders offer green car loans, not only for hybrid and electric vehicles, but also certain newer model petrol cars that are classified as low-emission vehicles.

And with the recent announcements of various government incentives and funding packages for electric cars, now could be the right time to make the switch to a greener vehicle.

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This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.

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