Grants, loans, tax credits and more ways for homeowners to pay for this pricey expense.
How can I finance a septic tank?
Installing or repairing a septic tank is one of the easiest home improvements to fund. That’s partly because the government wants to avoid raw sewage leaks and has several federal and local programs to help homeowners cover the costs. Consider starting with the following options when looking for septic tank financing.
State-funded septic tank financing
Some federal and state agencies offer low-income residents affordable loans and grants to replace or repair your septic tank. If you live in a rural area in particular, consider reaching out to your local government first to find out what options are available.
Some states with notable programs include:
- New York. Residents of some areas of New York state might be eligible for grants of up to $10,000 for replacing or repairing a septic tank from the Department of Environmental Conservation and Department of Health.
- Arizona, California, New Mexico and Texas. The USDA offers grants of up to $4,000 to individuals who live in a designated colonia.
USDA Single Family Housing Repair loans and grants
Don’t live in a state that specifically offers septic tank financing? The USDA also offers general-use home repair loans and grants to low-income households. Loans run up to $20,000 with interest rates fixed at 1%. Grants can get as high as $7,500.
To qualify for a loan, you must be the homeowner, currently occupy the house and have a household income of less than 50% of the median income in your area. If you’re over 62 years old, you’re also eligible for a grant. You can get started on your application by contacting your local USDA office.
Septic tank loans
Some lenders offer loans specifically for replacing or repairing a septic tank. You can often find these through nonprofit lenders like Craft3 in the Pacific Northwest, which offers APRs close to 2% and flexible repayment terms. Your home and septic tank might need to meet certain requirements to qualify.
Since nonprofits tend to serve one community, you might have better luck finding one through your local housing department, USDA office or Department of Environmental Conservation.
Home equity loans
Home equity loans and lines of credit (HELOCs) are one of the most popular ways to fund home improvements, including repairing or replacing a septic tank. Also known as a second mortgage, a home equity loan involves borrowing against the amount you own in your home.
Backing your loan with your house can help you qualify for more competitive rates and terms than an unsecured personal loan, though you risk losing your home if you can’t pay it back.
Unsecured personal loans
Borrowers with strong credit might want to consider taking out an unsecured personal loan. If you can qualify for a personal loan, you likely won’t be eligible for government loans or grants.
It’s also less of a risk than a home equity loan, since you don’t need collateral. Personal loans typically range from $2,000 to $50,000 with APRs starting around 6% and terms from three to seven years.
Septic company financing
Some septic companies offer financing plans for their services so you don’t have to pay it off all at once — many through third-party lenders like GreenSky. Others offer a combination of loans and same-as-cash financing.
Same-as-cash financing means you have often three to six months to pay your bill without paying interest. If you can’t pay it off during that time, you might have to pay interest that’s higher than the rates you’d get with a loan — similar to a credit card with a 0% promotional rate.
In addition to this, some septic companies have coupons on their website that offer discounts on services. You can typically use these in addition to financing to lower your cost even more.
State tax credits
Some states offer tax credits or deductions for repairing or buying a new septic tank. For example, Massachusetts allows its residents to get a tax refund for up to 40% of the cost of the tank. You won’t have to pay it back, though you might want to hire a tax expert to make sure you declare it correctly. You also need to provide the money up front, which isn’t helpful if you don’t have that kind of cash on hand.
Compare personal loan options to finance a septic tank
How much does a septic tank cost?
Septic tank costs can vary widely depending on where you live and what type of system you want to install. Generally, you can expect to pay between $3,000 and $8,500 to install a standard anaerobic septic tank, according to customers on HomeAdvisor. But alternative aerobic systems can get as expensive as $20,000.
Installation costs include renting a backhoe to dig the hole for the tank as well as hiring someone to put in the tank and plumbing. You might also have to dig up and repave your driveway to install the pipes leading to the septic tank. Once it’s installed, you need to have it inspected and pumped every few years, which can set you back hundreds or even thousands of dollars depending on where you live.
Repairing a septic tank
There’s a chance that when you get your septic tank inspected, you’ll have to make repairs. This typically ranges from $600 to $2,500, according to customers on HomeAdvisor.
One of the most common repairs is replacing a broken pipe, which can cost around $1,500 — and might involve digging up your driveway again. But if your septic tank has started to contaminate the area around it, you might have to move it to another location, which can set you back as much as $20,000.
4 tips for protecting your septic tank
The better you care for your septic tank, the less often you’ll need to make expensive repairs. Here are four ways to keep it in top shape:
- Use a high-efficiency shower head. Your septic tank can only handle so much water at once before it starts to back up. A high-efficiency shower head can help prevent that.
- Have multiple laundry days. Dividing your laundry into several smaller loads can also ensure you aren’t overloading your tank with water.
- Avoid your garbage disposal. Using a garbage disposal means you’ll have a lot more solid waste going into your tank, which leads to more frequent pumps.
- Watch what you flush. Anything that isn’t biodegradable can clog up your drain. This includes things you might not expect like dental floss, coffee grounds and any kind of oil or grease.
There are lots of financing options for installing or repairing a septic tank. Government-funded loans and grants are typically the most competitive, but they aren’t available to everyone and can take some time to process. If you’re in a pinch, a personal loan could be a better solution.
Read our personal loans guide to learn more about how they work and compare providers.
Frequently asked questions