Swimming pool financing

How does swimming pool financing work?

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.

Home equity 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. That security can lead to lower interest rates when compared to those offered with personal loans.

As a taxpayer, you can also claim a deduction on the interest you pay toward the first $100,000 of a home equity loan secured by your first or second home. While most home equity loans and lines of credit qualify for this tax benefit, you may fail to make the cut if you have more than one home — or if your mortgage exceeds the value of your home.

Personal loans

Personal loans can be a sensible choice for recent homebuyers and homeowners who live in areas with lower-priced properties. The top home improvement personal loans can offer funds up to $50,000 or $100,000.

You can choose between two types of personal loans: unsecured and secured. An unsecured personal loan doesn’t require you to put up any collateral to secure the amount you borrow. However, these tend to come with higher interest rates since they pose more risk to the lender. A secured personal loan is backed by one or more assets of your choosing and typically comes with lower interest rates.

No matter which you choose, you can often find a more competitive interest rate by comparing different lenders — especially if you have a good credit history.

How much does a swimming pool cost?

The cost of installing a pool depends on the type of pool and its size:

• Concrete and granite pools: Around $20,000 to $55,000
• Fiberglass pools: Around $15,000 to $25,000
• Vinyl-lined pools: Around $1,500 to $5,000

More upfront costs to consider

Swimming pool costs don’t stop at the price tag for the pool itself — safety and maintenance are also factors you need to consider for your budget. Consider these costs:

• Fencing. This vital safety feature can cost a lot of money, depending on the type of fencing and specific regulations you need to meet.
• Construction costs. If you run into major issues such as water lines or large rocks during the installation of the pool, you might have to pay more for construction.
• Insurance. Many providers charge higher premiums for home insurance if you have a swimming pool.

Where can I get a pool loan?

Many lenders that offer personal loans have amounts available up to the $50,000 mark. That means you’ll be able to check with a wide range of online lenders, banks and credit unions to find a term and rate that works for your budget.

Of the three, online lenders tend to be the fastest option if you’re looking to get your pool in a hurry. But they also tend to be more expensive than a loan from a bank or a credit union.

Can I qualify for a pool loan?

Most lenders look for applicants who:

• Have good or excellent credit. This means having a credit score over 670 — preferably over 740 for the best deals — and at least three years of good credit history.
• Have a steady source of income. This includes your job as well as other sources of income like investments, alimony checks and child support. Lenders typically require applicants to make at least $25,000 annually, though you might need to make near six figures to get the best deal.
• Have a low debt-to-income ratio. Most lenders require borrowers to have a debt-to-income ratio of 45% or lower, though the lower it is, the better chance you’ll have of getting competitive rates.
• Be a US citizen or permanent resident. Some lenders — not all — require that you live in the US as well.
• Be at least the legal age of majority in your state. In most states you must be at least 18 years old to legally be able to take out a loan, though some states go as high as 21.

Use our calculator to get an estimate of how much you can afford to borrow to finance a pool, based on your income and expenses.

What features should I consider for my new pool?

Before requesting a loan, you’ll need to figure out your budget for the pool. Considering the following factors will help you get quotes and estimates of the money required to get it all done.

Water features

These can include:

• Waterfalls
• Fountains
• Jets
• Bubblers

You can opt for spillover hot tubs and spas as well.

Tiles and liners

You can find pool tiles in an array of colors, textures and designs. Tiles used inside and outside the pool also come in different materials based on their functions.

For example, you may want to consider slip-resistant tiles for the area around the pool, and glossy, colored tiles for inside it.

If you plan to get a vinyl swimming pool, remember that you’ll have to replace the pool liner periodically.

Cleaners

There are several different types of pool cleaners:

• Suction cleaners. One of the most popular options, suction cleaners work as skimmers and complement the pool’s pumping and filtration system.
• Pressure cleaners. These use water pressure and usually come with replaceable filter bags.
• Electric cleaners. Also known as robotic cleaners, electric cleaners come with self-contained filters and pump systems.

If budget is not a constraint, you can go a step further and install an automated control system.

Lighting

Underwater lights increase safety after dark and can create a fun environment. You can also use floodlights and spotlights to draw attention to specific features, while low-profile lights are a practical addition to paths and walkways.

How to compare swimming pool loans

Features you should consider when comparing swimming pool loans include:

• APR. Rates for swimming pool loans vary depending on the product you choose, the amount you borrow, the loan term and your financial circumstances. Compare low-interest personal loans to find the most appropriate and affordable option for your circumstances.
• Loan amount. If you’re getting a home equity loan, the maximum amount you can borrow depends on the value of the property you’re using to secure the loan. Your creditworthiness and financial situation also have an impact on the loan amount for both home equity products and personal loans.
• Loan term. While opting for a longer loan term leads to lower monthly payments, it also means you’ll pay more in interest in the long run. Ideally, you should repay your loan as quickly as possible to keep interest payments down.
• Secured or unsecured. With a home equity loan, the money you borrow is secured by your property. You can also get a secured personal loan by borrowing against another asset, such as your vehicle or a term deposit.

When to avoid financing a swimming pool

Sometimes financing a swimming pool isn’t a smart choice. You might want avoid it in the following situations:

• If you’ll struggle to make the monthly repayments. Not repaying a loan on time will have an adverse effect on your creditworthiness. If you default on a secured loan, you also stand to lose the assets you put up as collateral.
• If you just want to add value to your home. Swimming pools aren’t always considered an asset to the existing property. Prospective homebuyers in some neighborhoods don’t want the added maintenance costs that a swimming pool brings. If you’re trying to cut back on expensive vacations investing in a timeshare could be as worthwhile as installing a pool.

Bottom line

Financing a pool could up your property value and be a boon to your social life if done right. But consider all of the costs you need to cover and what you can afford before taking out a loan to build a swimming pool.

Read our guide to learn more about how personal loans work and to compare personal loans.

Frequently asked questions

Can I get a 20-year pool loan?

It might be possible if you take out a home equity loan. However, a term that long means you’ll pay a lot in interest even if you have a good rate — potentially even more than the cost of the pool itself.

If you need a term that long to afford your monthly repayments, you might want to hold off on applying for financing altogether or save up to cover part of the expense.

Is there any benefit in using an online swimming pool loan calculator?

Yes. Using an online loan calculator gives you an indication of how much a loan will cost. It can also help you figure out what your periodical repayments will cost.

Can I get a swimming pool loan if I have poor credit?

Some lenders provide swimming pool financing to borrowers with less-than-perfect credit. In this case, you would have to provide some kind of security for the loan or pay a higher-than-standard interest rate.

What information do I have to provide to apply for a typical swimming pool loan?

This differs between lenders, but you’ll generally need to submit details about yourself, your employment, your income and your expenditures. Check each lender’s eligibility requirements first before you apply to make sure you qualify.