As a home services contractor, you know your way around job costs, materials, and labor—but when it comes to offering financing, terms like “APR” can make conversations with customers feel a little less comfortable. The good news? You just need to understand the basics and how to translate them into clear, helpful guidance that puts your customers at ease.
In this blog, we’ll break down what APR actually means, how it affects your customers, and how to talk about it in a way that builds trust and helps close more deals.
What Is APR?
APR stands for Annual Percentage Rate. It’s the total cost of borrowing money, expressed as a yearly percentage. Unlike interest rate alone, APR includes not just the interest but also any fees or costs associated with the loan (such as origination fees or lender charges).
Think of it as the “all-in” cost to the customer for financing their project over time.
Example:
If your customer takes out a $10,000 loan for a roof replacement at a 9.99% APR over 5 years, they’re not just repaying $10,000 — they’re also paying the cost of borrowing that money. Their total repayment will be more like $12,600, depending on the loan structure.
Why Does APR Matter?
APR gives your customers a clear idea of how much it will cost them to finance a project. That’s important because it helps them compare offers, evaluate whether monthly payments are manageable, and make an informed decision.
And for you? Understanding APR helps you answer customer questions with confidence — and avoid common objections like “I don’t want to take out a high-interest loan” by reframing the conversation around value and affordability.
How to Talk About APR with Customers
You don’t need to dive into amortization schedules or lender jargon. Instead, focus on being clear, helpful, and honest. Here are some practical tips:
1. Lead with the Monthly Payment
“We offer financing options where your project could cost as little as $175/month.”
Most homeowners care more about what they can afford monthly than the technical details of the APR. Start with the payment, then offer to explain the loan terms if they’re interested.
2. Be Transparent About the Full Cost
“The total cost of borrowing includes the interest, so the APR gives you the full picture of what you’ll repay.”
This builds trust. If they’re comparing financing options, remind them to look at the APR — not just the advertised interest rate — to get an apples-to-apples comparison.
3. Frame Financing as a Tool, Not a Burden
“The APR is just the cost of being able to do this project now — and often, it’s a lot more affordable than waiting and paying for bigger problems later.”
Position financing as a solution to a problem — like an urgent repair or an upgrade they’ve been putting off — not just a loan.
What You Shouldn’t Do When Talking About APR
- Don’t promise a specific APR unless you’re licensed to do so and backed by real prequalification results.
- Don’t downplay high rates. Be honest and help the customer evaluate if the project is still worth it.
- Don’t avoid the conversation. If you’re not comfortable talking about APR, get trained or work with a financing partner that offers support.
APR is an important part of customer financing, but it doesn’t have to be intimidating. As a contractor, your role isn’t to sell loans; it’s to help your customers get the work they need, on terms they can afford. By understanding what APR means and how to talk about it clearly and ethically, you’ll build more trust, close more deals, and grow your business.
Want to offer financing with fair APRs and an easy application process? Schedule a demo with Hearth to learn how our platform helps home service pros like you close more jobs and get paid faster without becoming a banker.
