Home Improvement

Best swimming pool financing options


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Adding a swimming pool to your backyard can boost your personal enjoyment of your home and your property values. However, you shouldn’t dive into pool ownership without careful thought — and some money to spend. Pools require ongoing maintenance and care. You’ll also have to factor in the added costs of outdoor landscaping and hardscaping, pool chemicals, maintenance and, of course, fun water toys and pool accessories.

Then there’s the high cost of installing a pool in the first place, which can be reasonable or exorbitant depending on your tastes. According to the experts, a basic fiberglass pool without installation will cost anywhere between $9,000 and $24,000. However, no installation means you’re doing all the work yourself, which is not feasible in most cases — especially if you don’t have any pool-related experience.

If you want a turnkey fiberglass inground pool with installation, setup and all the nitty gritty details take care of on your behalf, you can expect to pay $45,000 to $85,000 or more. Above ground pools can cost considerably less — or around $6,243, according to home improvement website Fixr. But even six grand is still a tidy sum of cash, and you still need to factor in all those other costs.

The big question is: How do you pay for the pool of your dreams?

Pool financing with a personal loan

Due to the high initial investment required for a new pool, many homeowners opt to borrow money for the project and pay it off over time. After all, borrowing money the right way makes it easy to get the pool you want without having to come up with all the cash up front.

The most popular option among pool loans is the tried-and-true personal loan. With a personal loan, you can borrow a lump sum at a fixed interest rate and get a fixed repayment period. This means you’ll get a regular monthly payment that will never change. Another benefit is you’ll know exactly when you’ll become debt-free.

Personal loans are also unsecured, meaning you don’t have to put your home down as collateral to get approved. If you have very good or excellent credit — or any FICO score over 740 — you may even be able to qualify for a pool loan with a fixed interest rate as low as 5 percent.

To recap, the main advantages of using a personal loan for your pool financing needs include:

  • Fixed rates: A personal loan for a swimming pool comes with a fixed rate and a set payment schedule. Most personal loans come without prepayment penalties, so you might be able to make extra payments and pay down your loan early.
  • Low or no fees: Personal loans often come with low fees or no fees, making them a very inexpensive option when compared to other swimming pool loans.
  • Competitive financing: You’re in control and can choose from a number of personal loan offers and repayment terms that fit your lifestyle and your budget.
  • Quick funding: Depending on the lender you choose, you may receive your loan funds in as little as 24 hours. You can then use these funds to act as a cash buyer and negotiate with your pool installer or contractor.
  • Unsecured loans Personal loans are usually unsecured, so it may not be necessary to tap into your home’s equity.
  • Simple approval: You might get approved for a personal loan based on just your credit score and income. Before you apply, check your credit score for free through Bankrate.

Alternative pool financing options

If you want to consider other options outside of personal loans, you may also want to look at home equity loans or home equity lines of credit (HELOCs). Both loan products let you borrow against the value of your home and use it as collateral, thus helping you secure a competitive interest rate. However, these loans do work differently.

Home equity loans, for instance, work like personal loans, as they come with a fixed interest rate, a fixed repayment timeline, and a fixed monthly payment that will never change. With a HELOC, on the other hand, you get access to a line of credit you can borrow against — typically with a variable interest rate. Since your rate may go up and down due to rate fluctuations in the market, and the amount you wind up borrowing isn’t set in stone, your payment can also change throughout the life of the loan.

While home equity loans and HELOCs come with many of the same benefits of personal loans, using your home as collateral can present some added risk. For example, your home will be subject to foreclosure if you stop making your home equity loan or HELOC payment, which is not the case with personal loans. Also note that you can typically only borrow up to 85 percent of your home’s value in a first mortgage and home equity product combined, so this option will only work for consumers who have a lot of untapped equity in their properties.

Read this before you commit to swimming pool financing

Before you take out a personal loan or apply for any other pool financing product, it helps to get a good idea of how much you’ll spend. Consider speaking with a few pool contractors to get a ballpark estimate on your final price, then play around with a pool loan calculator to see how much your monthly payment may be depending on your interest rate and other factors. If you want to pay your loan off quickly, for example, you’ll need to pay a higher monthly payment. If you plan to spread your payments out over the long haul, on the other hand, you may be able to get away with paying a smaller monthly amount.

In addition to studying costs and estimating your monthly payment, it can also help to think long and hard about how long you intend to stay in your home. If you plan to stay put for decades or longer, you’ll need to consider the long-term costs of owning and operating a pool. If you plan to move in a few years, you should know that homes with a pool may be worth more — but they may also appeal to a smaller pool of buyers since not everyone wants a pool in their backyard.

You may also want to tailor your loan to how long you plan to stay in your home since you probably don’t want to be paying for a swimming pool loan long after you sell your house and move.

The bottom line

Having your own backyard pool may seem like a dream come true. But it could quickly become a nightmare if you’re not prepared for the costs of ownership. By considering several pool financing options and shopping around for the least expensive swimming pool loan you can find, you can minimize your costs and enjoy pool season without the stress.