Swimming Pool Financing & Loans

Installing a swimming pool doesn’t come cheap. So, if you want to build a pool in your backyard, you might want to consider pool financing — unless you have a good amount of savings to sponsor your home improvement project.

Pool financing refers to getting some kind of monetary aid or credit from reputable loan lenders, banks, or credit unions — specifically for the project. It could be an unsecured personal loan, a home equity loan, a cash-out refinance, or a home equity line of credit (HELOC). Each financial option for a swimming pool loan comes with its distinct features, pros and cons, and eligibility.

Depending on your zip code, adding a pool can increase your home’s value by as much as 7%. Apart from this, installing a pool can provide you with unmatched enjoyment — keeping you cool during the summer months and providing you with the perfect party spot! 

However, pool installations are pricey, especially if you want to customize the pool design or add features such as pool heaters, waterfalls, Jacuzzi, etc. That’s when swimming pool financing comes to your aid — making your backyard dreams more affordable than you think.

Read more: Home addition loans: financing a home addition

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How much does a swimming pool cost on average?

When it comes to pool costs, above-ground pools are cheaper than in-ground pools. Above ground pools cost between $1,850 and $4,977 while in-ground pools cost anywhere between $28,000 and $55,000 on average. Although above ground pool financing might be easier to get such pools do not add much value to your home and are not as long-lasting. 

The total pool installation cost depends on the type of pool, its shape as well as size, labor costs, degree of customization, and your geographical location. 

To give you a better idea, here’s a look at some of the popular inground pools and their average costs:

• Vinyl pool: $20,000s to $60,000s
• Fiberglass pool: $20,000s to $40,000s
• Concrete pool: $30,000 to $60,000

Read more: Luxury home upgrades: Pool enclosure financing

What is the average monthly payment for a pool?

Usually, pool financing will give you access to anything between $5,000 to $100,000 — depending upon the type of loan. And, loan interest rates depend on your credit score as well as your loan term (swimming pool payment years). For example, if you get a loan of $25,000, at 5% for 15 years, your average monthly payment will be around $200.

Read more: Deck loans & financing options

What credit score do you need to finance a pool?

Although borrowers with less-than-perfect credit scores may manage to qualify for pool financing, the desired minimum credit score is at least 670. Credit scores of 740 or higher will give you lower interest rates and more affordable monthly payments.

Looking for a home renovation loan for your swimming pool installation? Peruse through Kukun’s easy loan options and get your dream pool now. 

Read more: Complete rundown on pool removal: Cost, permits and more

Is it hard to finance a swimming pool?

So, can you get financing for a swimming pool with bad credit? Yes. there are options but you should be prepared for the high-interest rates and fees. Even if you’re willing to accept the advertised rates and terms, there’s another obstacle to cross — qualifying for swimming pool financing. 

To determine whether you’re eligible or not, lenders consider different factors, including your credit history and employment history.

If you’re applying for swimming pool loans with fair or even bad credit, it might not be the right time to add the financial burden of buying and installing a pool.

It’s best to work towards improving your credit and your financial situation. You may get a better pool-financing deal with a lower interest rate in the future.

Read more: Easy hot tub financing options for good & bad credit

How to finance a pool?

There are several types of home renovation loans available for homeowners. It’s important to understand their differences before choosing the most suitable financing plan based on loan purposes. Let’s look at some of the most popular swimming pool financing options.

• Home equity loan: A home equity loan, or a second mortgage, lets you borrow funds against the equity you’ve built in your home. Your home equity is measured as the difference between your home’s current value and the amount you owe on your mortgage. This determines the total loan amount you can borrow.   
• Home equity line of credit (HELOC): A HELOC also works on the basis of your home equity. But here, unlike home equity loans, you get your money in a lump sum. You get a revolving line of credit that allows you to use the line of credit again and again. There’s a draw period during which you can borrow money and then there’s the repayment period of returning what you owe. 
• Cash-out refinance: In this type of funding, you can replace your existing mortgage with a new home loan (at a lesser interest rate) for more than you owe on your house. The cost difference goes to you in lump sum cash, which you can use for your pool financing. 
• Unsecured personal loan: Personal loans are unsecured loans that do not require any home equity or asset as collateral. Since it’s a riskier proposition for the loan lender, the repayment terms tend to be shorter and the loan amount lesser. Personal loans tend to have higher interest rates than other types of financing, but it’s quicker — without putting your home at a foreclosure risk. 

Read more: Plumbing financing for good & bad credit

How long can you finance a swimming pool?

Most fixed-rate loans up to $100,000 come with loan terms from 1 to 5 years. If you get a home improvement loan for a pool, the term will be 7 to 15 years in all likelihood. The length of a typical mortgage loan is 30 years. If you’re buying a new home and want to add a pool, you can integrate your pool loan into your mortgage. That way, the pool cost is spread over three decades — making your loan payment easy to manage and affordable.

Keep in mind that loan terms are subject to change without notice, and depend on your loan lender/loan type. 

Here’s the loan term range of some of the best swimming pool loans:

Read more: How do home improvement loans work and what to choose

Pros and cons of financing a swimming pool

There’s nothing better than having your own backyard pool to enjoy with your friends and family — especially when public pools are closed. Once you zero in on the best way to finance a pool, it’s easier to plan your pool installation — on schedule and in budget! And, the comfortable payment programs will make your home remodeling easier and manageable. Pool financing will get you the swimming pool you’ve always wanted — with the convenience of paying for it over time through favorable interest rates and fixed/adjustable monthly payments. Of course, they will be based on your credit score and credit report. 

Paying back the loan funds — whether through loans, credit unions, or credit cards — is another story. Making your scheduled monthly payments can be a bit stressful, especially if you’re experiencing cash flow difficulties. And, with home equity loans, there’s an added risk of property foreclosure. 

Always remember that if you default on your repayments, it can adversely affect your credit score and credit rating. But, don’t let that dissuade you from owning a beautiful swimming pool in your backyard. Plan your pool loan well and you’ll be just fine!

Where can I get a swimming pool loan?

Irrespective of whether you choose an inground or above ground swimming pool, there are four financing options you can choose from, each of which have their own advantages and disadvantages.

Personal loans

Personal loans are sometimes advertised as pool loans by banks and other financial lenders. These loans do not require any collateral. Once you are approved, you get the approved amount for your swimming pool directly into your account.

Personal loans are faster to process than secured loans are. The application process is also simpler in comparison, and the money hits your account in a few days.

On the downside, interest rates are higher on personal loans, and the repayment window is smaller, usually between two and five years. Also the longer the term of the loan, the higher the interest rate.

HELOC

A Home Equity Line of Credit is a loan approved for you based on how much equity you have on your home. It is like a credit card in that you don’t need to take a lump sum. You can take only as much as you need for your swimming pool. You will be charged interest only on that amount.

The draw period is over 10 years, which means you’re likely to have access to the money long after you’ve repaid what you borrowed for your pool. The documentation for a HELOC is minimal, and the disbursal happens in a matter of weeks.

The interest charged on HELOC loans is tax-deductible, which is an added advantage.

There are, however, several downsides to getting a HELOC loan to finance your swimming pool. For one, the interest rates are variable, which means your payments will not be fixed. It also creates a second mortgage, increasing your mortgage balance and making it difficult for you to refinance your home if you need to in the future.

It also uses your home as collateral, meaning you risk losing your home if you default on your HELOC payments, even if your mortgage payments are on time.

Home equity loan

Home equity loans are secured loans that are similar to taking a second mortgage. The way a home equity loan works is that you tap into the equity you have in your home and get a lump sum that you can spend on home improvements, including financing a swimming pool.

Home equity loans have fixed interest rates, which also tend to be lower than personal loans or HELOC loans. The interest on these loans is also often tax-deductible. Term lengths can go on for as long as 30 years.

However, home equity loans come with closing costs. Once again, your home is used as collateral, which means if you default on the loan, you could end up losing your home.

Cash-out refinancing

This is when you replace your current mortgage with a new one. Depending on how much equity you have in your home, you may have a cask left over when you refinance. You can use this cash to finance your swimming pool.

The biggest advantage of cash-out refinancing is that you will be able to borrow up to 80% of your home equity. This should more than cover the cost of refinancing.

Depending on your financial situation, you could choose to increase or decrease the term of your mortgage., while also shifting from a variable interest rate to a fixed interest rate.

This is a great option if, by getting a new mortgage, you can drop your interest rate and cash out.

However, it also means that you will need to go through the entire mortgage application process again, and your credit score will need to be fairly high for you to qualify. You will also need to deal with closing costs of 2% to 5% of the loan amount.

Finally, being a secured loan, you also risk foreclosure on your home if you consistently fail to keep up with the repayment schedule.

Is pool financing expensive?

Pool financing can be an expensive affair. To start off with, there is the cost of pools themselves. Vinyl pools can cost between $20,000 to $60,000. Fiberglass pools are more affordable, costing between $20,000 and $40,000. Concrete pools can also cost between $30,000 and $60,000. 

Now that’s the cost of the pools only. Add the cost of decking, waterfalls, grottos, slides, and other bells and whistles, you could end up spending more than $100,000. 

Now, you’ll need to add the interest you’ll pay on the loan for your swimming pool. Depending on the type of financing and the lender you choose to work with, your annual percentage rate could vary from 5% all the way to 36% or more.

Qualifying for a swimming pool loan

Even if you are willing to pay the high rates of interest lenders charge, you will still need to qualify for a loan. One of the main factors lenders look at is your credit history.

While you may find lenders willing to lend you money even if you have a less than perfect credit score, the interest rate charged is likely to be exorbitant. With an already suffering credit score, you will need to think about whether you are in a position to take on the additional burden.

Will a swimming pool increase the value of my home?

This depends on the kind of pool you have installed. While above-ground pools do not do much to add to the value of a home, and may in fact turn away prospective buyers, inground pools are known to increase the value of a home by around 7%. For this reason, a lot of HOAs permit only inground pools in their communities.

Keep in mind though that the average homeowner spends around 30% of their property value on a swimming pool, and are lucky if they recover half that investment at the time of selling their home.

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Written by Ramona Sinha. December 8, 2020

Ramona is a content writer for Kukun. This experienced blogger uses simple and succinct words to decipher the complex phenomenon called life. An avid traveler, she’s a digital nomad at heart and an animal lover from the depths of her soul.