Pool Financing 101: How to Pay For a Pool

Owning a pool is a dream for many people. From above ground fiberglass pools to indoor inground pools, fancy lighting to saltwater systems, there are many pool options to consider.

Financing a pool can be a challenge due to both the upfront expenses of installing the pool and the long-term maintenance costs. Personal loans might be a viable option for covering these expenses. Let’s dive into what you should know for financing a pool.

The costs associated with building a pool

While the average national cost of building a pool is around $20,000, the total cost of installing a pool can vary greatly based on your pool type, upgrades, size, landscaping, and other factors. Here is a breakdown of the main costs associated with building a pool.

Initial installation

Installing a pool involves paying for excavation, labor, pool materials, and more. You might need to level a yard and install plumbing or electricity.

Installing an above ground pool starts at around $2,000 and goes up to $8,000. A semi inground pool will cost more, with minimum costs of $6,000 and going upward to $10,000 in installation fees.

If you want a more luxurious pool, you might opt for a vinyl liner, concrete, or fiberglass pool. These pools can easily cost over $20,000 for installation. A plunge pool or spa will also cost around $20,000.

For those seeking to finance an indoor or lagoon pool, expect to pay over $100,000 in installation costs.

Finally, if you’d prefer a saltwater pool, you will need to pay anything from $10,000 to $40,000 for installation if you’re building from scratch. Converting a standard chlorine pool to saltwater will cost less since you only need to pay for installing a saltwater chlorination system, which goes for around $2,000.

Pool upgrades

It’s an enjoyable experience to plan out the many upgrades and accessories to decorate your pool area and increase functionality. Here are the estimated costs for the common pool upgrades that property owners purchase.

• Pool deck: $8,000
• Fence: $6,000
• Hot tub: $10,000
• Pool lighting: $1,000
• Pool cover: $1,500
• Automatic pool cover: $10,000
• Pool waterfall: $2,000

Maintenance and running costs

After the pool has been installed, it’s essential to properly maintain and run the pool. This can cost several hundred dollars a month. Maintenance and repairs involve numerous tasks, such as:

• Adding chemicals
• Replacing and repairing broken parts
• Monthly energy costs for running the pool pump
• Skimming and filtering the water

Financing options for your pool

Personal loans

Personal loans grant you loan funds to use for various expenses. The main advantages to personal loans include:

• Easy application process
• Competitive interest rates
• Flexible repayment terms
• Favorable for those with good credit
• Can help establish credit over time
• Versatile fund usage

You can find personal loan providers both online and in person. The loan application process is relatively fast, so if you need quick funding for your pool, a personal loan could be the way to go.

Home equity loans

You can take out a home equity loan, which essentially allows you to borrow against your existing equity to receive a lump sum of money. If you are financially stable and would like a loan with the lowest interest rates, a secured loan in the form of a home equity loan could be your preferred choice for financing a pool.

However, a home equity loan does have its risks. If you fail to repay the loan or breach the repayment terms, you can lose your property. The lender will be able to repossess it to recoup losses.

Home equity line of credit

A home equity line of credit (HELOC) lets you borrow against the equity built in your home. Like a home equity loan, both are secured by your property. The difference is that with a HELOC, you are applying for an open line of credit and not a lump sum loan.

Credit cards

A credit card can be a convenient and helpful way to provide short-term financing. If you need to purchase pool accessories and upgrades, a credit card could be useful.

The downside to using a credit card is that if you aren’t able to pay down the balance, you will start accumulating high interest. Most credit cards have relatively high interest rates, making them not the optimal financing method for a pool.

Pool financing companies

Pool financing companies and organizations offer specialized loans for pools. These loans are meant to specifically fund pool construction, renovation, and installation.

If you’re confident you want to use loan funds to build a pool, comparing pool financing companies could help you strike the best deal.

Personal savings

It is fairly common to dip into individual savings to pay for a pool. This allows you to avoid debt obligations if you can afford the pool with your savings.

There is a notable level of risk associated with using your personal savings as opposed to a financing method. If you end up with other bills you need to pay due to unforeseen circumstances, not having enough money in your individual savings account can hurt your financial stability.

Retirement savings

If you have a retirement account such as a 401(k), you could borrow against it in order to fund your pool project. However, not only does this strategy come with potential tax implications, but it can also affect your retirement quality in the future. It’s advisable to consider other options before borrowing against your retirement account.

Things to consider before taking a loan

Before taking out a loan, it’s important to evaluate key factors that affect the outcome of your loan. Here are the essentials to keep in mind.

Loan tenure and interest rate

The loan tenure refers to the duration of the loan and the time it will take to pay off the loan. If you want more time to gather funds for loan repayment, a longer loan tenure generally has lower monthly installments. On the other hand, a shorter loan tenure results in less interest accumulating, but you will have less time to repay the loan.

A lower interest rate can reduce the cost of borrowing, but it’s also important to look at the annual percentage rate (APR). The APR is a more comprehensive rate that takes into account the interest rate, discount points, lender fees, and other factors that affect your annual cost of borrowing.

Potential impact on credit score

When you apply for a loan, creditors will make hard inquiries that lower your credit score by around five points each.

To mitigate the effect of taking out a loan on your credit score, you can pre-qualify for loans first before going through hard credit checks.

The advantage to taking out a loan is that you can use this opportunity to establish credit. By paying your loan installments on-time and regularly according to your repayment terms, you can show creditors that you are creditworthy and good at debt management. This can increase your credit score and help you obtain better interest rates in the future.

Different lenders

Finding the best loan that suits your needs and goals can make a big difference. Reputable lenders are more likely to give you good rates and fair loan terms. On the other hand, predatory lenders may try to take advantage of unaware borrowers through hidden fees in the fine print.

When shopping around for personal loans for a pool, take the time to consider different loan offers and research the reputations of each loan provider. Choose the option that makes the most sense to you. Remember, just because you have received a loan offer doesn’t mean you must sign the loan agreement.

Cost of the pool

Before committing to a loan or even beginning your pool installation, it’s advisable to calculate the total cost of the pool. This includes landscaping, installation, pool upgrades, labor costs, and other associated expenses. Knowing the total expected cost of a pool helps you choose a suitable loan amount so that you don’t take on unnecessary debt.

The role of credit score in pool financing

There are two main credit scoring models: VantageScore and FICO. Both credit scores can greatly impact loan approval and terms. The higher your credit score, the more likely you can receive a loan with favorable interest rates and larger loan amounts so you can buy the pool you want.

Improving your credit score can help you obtain a better personal loan. Here are the main ways to improve your credit score.

Pay down your credit card balances

A major factor influencing your credit score is the credit utilization ratio (i.e. how much of your total available credit is being used). It accounts for around 30 percent of your credit score. A high credit utilization ratio damages your credit score.

If you pay down your credit card balances and decrease your credit utilization, you can typically see credit score improvement within the next month. Lenders prefer borrowers with a credit utilization ratio below 30 percent.

Make bill payments on time

Making regular, on-time payments of all your bills shows creditors that you are financially responsible. If you struggle with multiple debt obligations, you might want to consider setting up automatic payments or consolidating your debt to make it more manageable.

Improve your credit mix

Having both revolving and installment credit can increase your credit score by letting you achieve a better credit mix. While it is not necessary to have every kind of account on your credit report, a diverse credit mix can help since it counts for around 10 percent of your credit score.

Keep old, unused credit accounts open

Keeping unused accounts open on your credit report can increase your credit score, as long as the account doesn’t have any derogatory marks on it (e.g. missed payments, loan default, etc.) or high annual fees. Maintaining a lengthy credit history can enhance your creditworthiness in the eyes of lenders.

The long-term return on investment

When embarking on a journey to build your dream pool, it’s a good idea to consider the return on investment (ROI) so that you’re aware how the pool can affect your finances.

The potential increase in property value

A well-maintained pool could skyrocket your property resale value. Many homebuyers see a pool as a desirable, luxurious feature. They might be willing to pay more money for your property if it has an aesthetic pool.

Still, it’s important to consider the potential negative impact on your property value. Some homebuyers view pools as a liability due to its maintenance costs and safety risks.

Quality of life improvement

A pool can significantly raise your quality of life. It’s a refreshing place to sunbathe in the hot summer months, socialize with friends and family, and host gatherings. Much of the value of a pool is intangible and unquantifiable since it is for enjoyment.

Cost vs. value consideration over time

The construction and maintenance costs of the pool may be worth it now, but it’s a good idea to outline the future costs and benefits of the pool. Look at the potential income generated from the pool, but also consider maintenance expenses, property taxes, and utility bills.

Key takeaways

Thorough research of pool financing options can help you find the strategy that suits your goals best. Here are the key takeaways for pool financing 101.

• Look through all financing options to find the most favorable one
• Know how much money is needed to build your pool
• Perform a cost-benefit analysis before taking out a loan
• Consider the impact of a pool on your property value

If you opt for a personal loan to finance your pool, make sure you compare loan offers between suitable loan providers. Here are several reputable lenders able to grant the large loan amounts needed for buying a pool.

• Credible
• LightStream
• SoFi
• Upgrade
• Discover

About The Author

Ru Chen

Content Writer

Ru Chen is a content writer with several years of experience in creating engaging and well-researched articles. She mostly writes about business, digital marketing, and law. In her free time, she can be found watching horror movies and playing board games with her partner in Brooklyn.

Articles by Ru Chen

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