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According to HomeAdvisor, having an in-ground pool professionally installed can cost anywhere from $38,000 to $72,000, depending on the materials used, the size of the pool, and its shape. With an average cost of more than $54,000, it’s no surprise some homeowners are opting for it finance this purchase with a personal loan.
Let’s dive into what pool loans are, how to secure one, and if pool financing is right for your unique budget.
You can use Credible to do this Compare personal loan rates from different lenders in minutes.
What are swimming pool loans and how do they work?
A pool loan is a personal loan that you use to finance a pool installation. Because personal loans are usually unsecured, you don’t need to provide collateral for financing approval. And interest rates on personal loans are typically lower than credit card interest rates, making them a more affordable option for funding a pool.
The amount of money you can borrow and the terms offered vary from lender to lender. When you apply for a pool loan, lenders evaluate your unique credit profile, income, and other factors before deciding what interest rate and terms to offer you. Personal loan amounts typically range from $100 to $100,000 and repayment terms generally range from one to seven years.
A variety of lenders offer pool loans, including banks, credit unions, online lenders, and pool dealers. It’s a good idea to investigate personal loans from your current bank or credit union to see if you’re eligible for special discounts. Keep in mind that online lenders and pool dealers may be able to offer lower interest rates, especially for new customers. For example, your pool installation company may already have a relationship with a particular lender, making it easier for you to get approved.
Unfortunately, there is no guarantee that a pool dealer will offer you the best prices or terms. Looking around is the best way to help you identify The cheapest loans even with bad credit.
Believable lets you Compare personal loan rates without affecting your creditworthiness.
What credit rating do you need for a swimming pool loan?
Each lender sets unique requirements for securing a personal loan, including the minimum acceptable credit rating. In general, personal lenders prefer credit scores of 670 or higher, which are considered good credit. Although scores of 669 or lower are considered fair and scores below 579 are considered poor, some lenders may approve loans for borrowers with a score as low as 550.
If you’re concerned that your credit score might be too low — or if you want to boost your credit score before applying for a pool loan — you can start improving it today by paying your bills on time Reducing your debt to income ratio.
How to get a pool loan
Just as every lender has different requirements, interest rates, and loan terms, they also have different processes for applying for and securing a loan. In general, to get a swimming pool loan, follow these steps:
- Determine how much you need to borrow. Before you apply for a personal loan, you need to determine how much the pool will cost. Shop around to compare prices and consider any additional costs you may have such as: B. installing a fence around the pool or buying a pool cover.
- Check your credit score. You can request free copies of your credit report annually through AnnualCreditReport.com. Identify any errors in the report that you may need to dispute with the credit bureaus before applying for a new personal loan.
- Shop around and compare loans. Compare loans from a variety of brick-and-mortar and online lenders to make sure you’re getting the best interest rate and terms for your situation.
- Apply for the loan. When applying for a personal loan, you will typically need to provide proof of income, proof of identity and address, payslips, and recent tax returns. If approved, you will typically receive your loan between one and five business days, although in some cases it may take longer.
When you’re ready to apply for a swimming pool loan, Credible can easily help you Compare personal loan rates.
Should You Fund a Swimming Pool?
Financing a swimming pool with a personal loan can be a good decision if you can comfortably afford the payments, including all interest and fees. Your financial situation is unique, so before you apply for a pool loan, consider the following:
- Do you need good to excellent credit to get the best rates — If your credit score is below 670, it becomes difficult to get the best interest rates and terms. Consider improving your credit score before applying for a personal loan so you can get better interest rates.
- Ongoing maintenance costs — The total cost of pool ownership applies to the life of the pool, not just the life of your pool loan. The average annual cost for basic pool maintenance ranges from $1,200 to $1,800, according to HomeAdvisor, and that doesn’t include various repair fees or increased utility costs.
- ROI — A swimming pool can add value to your home, but there’s no guarantee it will – or that you’ll recoup your initial investment. If you are installing a pool for resale potential, consider whether finance other home improvement jobs will provide a better return on your investment.
Alternatives to the pool loan
A personal loan can be a good option for financing a swimming pool, but it’s not the only one you should consider. Here are three other pool financing options:
- payout refinancing — A payoff refinance allows you to access the equity in your home by replacing your existing mortgage loan with a new loan for more than you owe on the loan — you can pocket the difference in cash. The new loan may have a lower interest rate or different repayment terms. Although some homeowners use cash-out refinancing for home improvement jobs like installing a swimming pool, one downside is that you could increase your risk of foreclosure if you can’t make your new mortgage payments.
- Home Equity Loan or Home Equity Line of Credit (HELOC) — A Home Equity Loans and HELOC are both a second mortgage. With a home equity line of credit, you get cash up front as a lump sum, and you usually have a fixed interest rate, so your monthly payment doesn’t change. But with a HELOC, you can continue to withdraw funds as needed during the draw period, up to your credit limit. HELOC interest rates are typically variable, which means your interest rate can increase over time. Since you are putting up your home as collateral, you risk losing your home if you are unable to keep up with the payments.
- Save to pay cash — Financing your pool with cash ensures that you don’t have to pay any interest or additional fees. Large cash purchases will not affect your credit score, although it may take longer to save such a large amount. You also risk depleting your savings, which may be necessary in an emergency.