Reading your 10-year loan result
Why a 10-year term saves the most in interest
Of the common solar loan terms, 10 years pays off the fastest and accrues the least total interest, since the balance has fewer years to compound against. On a $28,000 loan at 6.99% APR, a 10-year term costs about $10,995 in total interest, compared to $24,060 on a 20-year term at the same rate, more than double. The CFPB's explainer on how loan amortization works covers why shorter terms save this much.
Why the monthly payment often exceeds typical bill savings
A 10-year term's monthly payment, around $325 on a $28,000 loan, frequently runs higher than a typical monthly solar bill savings figure, which often falls in the $100 to $175 range. That gap is the tradeoff for the faster payoff and lower total cost, and it's why many people choose a longer term specifically to keep the loan closer to cash-flow neutral. The monthly bill reduction estimator can help you check where your own savings figure lands.
Who a 10-year term makes the most sense for
A shorter term fits best for someone with room in their monthly budget beyond what solar saves, who wants to minimize total cost and be done paying as quickly as possible. It's also a strong fit if you're planning to sell your home in the medium term and would rather have the system paid off than carry a loan balance into the sale. HUD's homebuying resources cover general financial planning considerations worth reviewing alongside this decision.
Comparing 10 years against 15 or 20-year alternatives
A 15-year term splits the difference, with a lower payment than 10 years but still meaningfully less total interest than 20 or 25-year terms. Run the 15-year loan calculator or 20-year loan calculator side by side with this one to see exactly where each lands for your loan amount.
Whether paying extra toward a longer-term loan gets you the same result
Some people choose a 20 or 25-year term for payment flexibility, then pay extra toward principal when they can afford to, effectively paying it off closer to 10 years without being locked into the higher required payment. The early payoff savings calculator shows what that approach saves compared to sticking with the full term. Borrowing for the wrong size wastes money either way. The quick 5-minute system size estimator in our System Sizing section can help you confirm the size before you apply for a loan.