It seems as though there’s a heatwave in some part of Canada every summer, which means having a swimming pool is never a bad idea. Not only do swimming pools give you a place to cool off, they can also increase the value of your home. However, figuring out how to fund your new swimming pool can be a difficult task. If you don’t have cash or savings on hand, there are several loan options that can help you build your dream pool. Read our guide to find out more.
What are my loan options?
How it works depends on what type of financing you go for. There are two main loan options to cover the cost of a new swimming pool: home equity loans and personal loans.
With a home equity loan, the amount you can borrow is secured against the equity you hold in your home. This means your property is used as collateral for the loan. You can usually use up to 80% of the value of your home. When using home equity as collateral, you can normally secure a lower interest rate than those offered with unsecured personal loans.
Most retailers will offer some form of in-house financing at the point of sale. This means you can apply for a payment plan with the pool retailer directly. The retailer may even offer installations services which can be rolled into the total cost of your purchase. Rates and terms will vary and be determine by your retailer.
Using a low interest or balance transfer credit card to pay for your pool may be a good idea if you combine it with your savings and you’re able to pay off the balance by the time your card’s promotional period ends. Most balance transfer credit cards offer interest free periods from 6 – 9 months so you can make regular monthly payments without paying any interest. Be aware, though, that these cards rarely come with rewards or points and they usually revert to a regular interest rate after their promotional period ends.
You may decide to consider a personal loan. An unsecured personal loan means you won’t have to put up any collateral to secure the amount you borrow, however you’ll usually get a less competitive interest rate. If you choose a secured personal loan, you’ll normally be able to select the collateral you put up, whether that’s your vehicle, your home equity or something else of value. You can compare personal loans from online providers in the table below.
Compare home equity loans to finance a pool
Fairstone Secured Personal Loan
Alpine Credits Home Equity Loan
APR
APR
19.99% - 24.49%
10.00% - 22.99%
Loan Term
Loan Term
36 - 120 months
Up to 60 months
Loan Amount
Loan Amount
$5,000 - $50,000
$10,000 - $500,000
Fees
Fees
Varies by province
5.00% - 8.00% of the APR covers closing & admin fees
Min. Credit Score
Min. Credit Score
560
300
Provinces/Territories Serviced
Provinces/Territories Serviced
Canada-wide (excluding Nunavut)
AB, BC, ON, QC
Requirements
Requirements
Canadian resident, age of majority in your province of residence, home equity to use as collateral
Canadian citizen or permanent resident, must be a homeowner, no consumer proposal from past 3 years, no bankruptcy from past 7 years
The cost of installing a pool depends on the type of pool and its size. As a general guide, a concrete or granite pool can cost anywhere from $20,000 to $55,000, while a fiberglass pool can cost between $15,000 and $30,000 and it costs anywhere from $1,500 to $5,000 for a vinyl lined pool. However, the costs don’t stop there – safety and maintenance are also factors you need to consider for your budget. Fencing, for example, is an important safety feature and can cost a lot of money, depending on the type of fencing and specific regulations you need to meet.
There could be additional construction costs if you run into major issues such as water lines or large rocks during the installation of the pool. Many home insurance providers charge higher premiums for homes with swimming pools.
Meanwhile, pool maintenance is an ongoing cost that’s essential for the safety and value of your property. Expect to pay a monthly or annual fee if you’re hiring a professional to maintain your pool. Remember that even if you plan on maintaining it yourself, you’ll still have to spend money on pumps, filters, chemicals and other cleaning supplies, as well as heating costs.
Example: The Jones family get a swimming pool
The Jones family have been talking about getting an outdoor swimming pool for years – but they never seem to be able to save up quite enough to cover the costs. With $13,000.00 in available savings, Steve Jones decides to get a quote from a local pool company. With basic upgrades and a cement interior, Steve is told he’s looking at a total cost of $25,000.00.
Steve is happy to take out a loan to cover the remaining $12,000.00. Since summer is on its way, he wants work to get started on the pool immediately – and he knows his bank will take a couple of weeks to approve a loan. Instead, he settles on a personal loan from an online lender, which is funded directly into his bank account by the next business day. He has a good credit score and a fairly high income which makes him a great candidate for a competitive interest rate of 7.00% on a three year loan.
Cost of swimming pool/labour
$25,000.00
Loan type
Personal loan
Loan amount
$12,000.00
Interest rate (APR)
7.00%
Loan term
3 years
Additional fees
Origination fee of 3% ($360.00)
Monthly payment
$370.53
Total loan cost
$13,698.91
*The information in this example, including rates, fees and terms, is provided as a representative transaction. The actual cost of the product may vary depending on the retailer, the product specs and other factors.
Who qualifies for a pool loan?
While it can vary between lenders, most look for applicants who:
Have good or excellent credit. This means having a credit score over 650 and a few years of good credit history. In order to get more competitive rates, your credit score should ideally be 720 or higher.
Have a steady source of income. This includes your job as well as other sources of income you have, such as investments, alimony payments and other forms of income. You’ll need to provide proof of your income in order to qualify for a loan.
Have a low debt-to-income ratio. Most lenders require borrowers to have a debt-to-income ratio of 43% or lower, however the lower it is, the better chance you’ll have of getting a more competitive interest rate.
Be a Canadian citizen or a permanent resident. You’ll usually need to be a citizen or a permanent resident of Canada with a valid Canadian address.
Be 18 years of age, or the age of majority in your province or territory. You’ll need to meet the legal age requirements to take out a loan, which is usually 18 years old.
Features you should consider when comparing pool financing loans:
Interest rate. Depending on the lender you choose, the interest rates for swimming pool loans vary greatly. Factors including the amount you borrow, the loan term and your credit score will determine the rate you are offered. Remember that even a small difference in the interest rate can make a huge difference in the total cost of your loan.
Loan amount. If you need a large loan amount, you’ll need to look for lenders who offer large amounts. Some lenders will allow you to borrow between $500 and $35,000, while others may offer higher amounts.
Loan term. While opting for a longer loan term leads to lower repayments each month, it means you’ll pay more interest over the life of the loan which makes the loan more costly. Ideally, you should repay your loan as quickly as possible to keep interest payments down. Your repayments will be bigger each month, however the loan will cost less and be paid off faster.
Secured or unsecured. With a home equity loan, the money you borrow is secured by your house. You can also get a secured personal loan by borrowing against another asset, such as your vehicle. Remember that if you fail to make timely repayments towards any kind of secured loan, you stand to lose the collateral – which means you could lose your house or car. With unsecured loans, you aren’t required to put up collateral, however you may pay a higher annual percentage interest rate (APR) since you’re seen as a higher risk borrower.
Things to avoid when financing a swimming pool
When taking out a loan to finance your swimming pool, be aware of the following:
If you feel you may have trouble making your repayments on time, avoid taking out a loan in the first place. Not only will your loan cost you a lot more in late fees and interest, you’ll also likely damage your credit score.
Taking out a home equity or secured personal loan means if you default on your loan repayments, you stand to lose your collateral.
If you plan to get a pool with the sole purpose of adding value to your home, it’s also important to carefully research your options to make sure it will be considered as an asset to the existing property.
Some prospective home buyers in some neighbourhoods don’t want the added maintenance costs that a swimming pool brings, so do your research before you finance one.
Bottom line
There are several ways to finance that dream backyard pool from home equity loans and in-house financing to using a credit card and your own savings. Another way to financing your pool is to compare and apply for a personal loan from an online provider. Make sure that you compare rates and fees and that you meet the lender’s application criteria before applying.
Frequently asked questions about swimming pool loans
Yes. Using an online loan calculator gives you an indication of roughly how much a loan for your swimming pool will cost. It can also help you figure out what your weekly, bi-weekly or monthly repayments will cost.
Some lenders will give loans to borrowers with less than perfect credit. In this case, you would likely have to pay a higher than normal interest rate or offer up collateral in order to take out a loan. This means you would likely need to taking out a home equity or secured personal loan instead of an unsecured personal loan.
This will differ between lenders, but you’ll generally need to submit:
Your personal details including your full name, date of birth, email address, phone number and address.
Your employment details including your company name, address and contact details.
Your income and expenditure related details, which may include pay stubs, assets and liabilities.
Leanne Escobal is a publisher for Finder. She has over 11 years of experience in financial services, specializing in content and marketing. Leanne has completed the Canadian securities course (CSC®) as well as the personal lending and mortgages course by the Canadian Securities Institute. She has a Bachelor of Arts (Honours) in English literature and creative writing from Western University.
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