What is a pool loan?
A swimming pool loan is a personal loan you receive in a lump sum and repay with interest in fixed monthly installment payments. This type of loan is usually unsecured, meaning the pool isn't used as collateral for the loan. Instead, a lender uses your personal information (credit score, income, other debts, etc.) to determine your creditworthiness and whether you qualify for a loan and at what interest rate.
Can I use a HELOC as a pool or hot tub financing option?
Yes, you can absolutely use a HELOC to pay for a pool or hot tub. Lenders look favorably upon swimming pool financing because they see it as "home improvement" which will increase the value of the home.
A HELOC is an open credit line that you can use as you need to, which is ideal for projects that last a long time or have surprise costs. HELOCs have variable interest rates, so your monthly payments may fluctuate. Starting rates are often low, so it may be a low-cost way to add a pool, spa or a hot tub.
How much does it cost to build a pool?
Swimming pool is not a DIY job for almost anyone. It is also an expensive endeavor, which, nonetheless, will pay off over time. With an in-ground or built-in swimming pool - the permanent kind that requires a large hole to be dug in your yard - you can expect to spend from $35,000 to $100,000 for installation and add-ons, depending on the size, material, and layout. Larger pools with complicated designs and elaborate landscaping will increase the cost.
A cheaper option is an above-ground pool (a big tank with water in it). The cost of installation and add-ons is around $5,000 - $25,000. It is also cheaper to maintain an above-ground pool. Annual maintenance costs range from $1,000 to $1,200, whereas maintaining an in-ground pool can cost $1,000 - $4,000 annually.
What credit score is needed for pool financing?
Credit requirements for pool financing vary from lender to lender, and they also depend on the type of loan you use. Typically, credit scores ranging from 600 to 680 are the minimum scores required to qualify for a pool loan. When you finance a pool using a home equity loan of credit (HELOC) or home equity loan, you may need a higher credit score - 720 or higher.
However, if your credit score is lower than 600, it does not mean you won't qualify for a pool loan. Some lenders have lower credit requirements, so it is possible to get pool financing with lower credit scores. But keep in mind that lower credit cores mean higher interest rates and monthly payments.
How can I get a pool loan?
The process of getting a personal loan to finance a pool or a hot tub involves some important steps like getting an estimate on a pool, pre-qualifying, comparing received offers, and submitting a final application. When you work with a contractor, you can request a cost estimate for the project before you start shopping for a loan. When you know how much you need, you can choose a lender that offers the required amount at better terms.
While you shop for a loan, look for lenders that allow you to pre-qualify for a personal loan and see potential loan offers, including rates and monthly payments. Once you get the offers, you can take your time and compare various loan features, not only rates and monthly payments. Once you've found your "perfect" loan to finance a pool, submit your final application to get an approval decision from a lender. Lenders usually approve (or decline, unfortunately, that can happen to anyone) within a day or two and fund a loan within a week (but in fact much faster).
Can I finance a pool with a home improvement loan?
There are plenty of loan services that offer home improvement loans which can be used to build pools as well as to do other outdoor projects like landscaping. So, it is typically possible to finance a pool with a home improvement loan. However, some types of loans limit the types of renovations financing can be used for. Check with your lender for details of the loan you want to get.