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How to finance a pool

Yahoo Personal Finance· Getty Images
Updated 7 min read

Spending time by your pool can feel like a dream vacation in your own backyard. But this dream has a hefty price tag, especially if you put in an in-ground pool.

If you’re considering a new pool installation, here’s what to know about costs, pool financing options, and applying for financing.

According to the home improvement website HomeGuide, an in-ground pool installation costs $62,000 on average, with low-end installation costs around $25,000 and high-end costs soaring to $100,000. Actual expenses will depend on your location, the materials you choose for your pool, its depth, size, design, and other factors. Additional features like a fence or custom water features can result in higher costs.

Above-ground pools generally cost much less. HomeGuide estimates the average cost of an above-ground pool with installation is around $4,500, but it can range from $1,600 to $7,500. Opting for extras like decking or a fence could bring your total costs up to $20,000. Similar to an in-ground pool, several factors will impact your costs, including your location, materials, size, and more.

Besides installation, a pool is a home improvement project that comes with ongoing maintenance costs. Per HomeGuide, annual maintenance costs range from $3,000 to $6,000.

If you’re feeling discouraged by the hefty costs of pool installation and maintenance, the good news is you have many options to finance a pool. With swimming pool financing, you generally pay for the cost of your pool over time rather than upfront, so your backyard dream vacation may be within reach.

Each financing option works differently, with different timetables for approval and disbursal, varying borrower requirements, repayment terms, loan amounts, and more.

Personal loans are typically fixed-rate, unsecured loans widely available from many online lenders, banks, and credit unions. You borrow a lump sum at a fixed interest rate and make loan payments on a set monthly schedule. Unlike secured loans, which require a borrower to provide collateral, such as a vehicle or a home, unsecured personal loans don’t require collateral. When you apply for a personal loan, getting approved depends on your creditworthiness.

It’s possible to qualify for a personal loan with a credit score on the lower end of the scoring range, meaning a score of at least 580. But to qualify for the best personal loan rates and terms, you’ll need at least a good credit score. A score above 670 is generally considered good. You’ll qualify for the lowest rates and have more loan options if you have an excellent credit score — 750 or higher.

Loan amounts, rates, borrower requirements, and loan terms vary by lender. That said, terms of up to 144 months and maximum loan amounts of $100,000 may be available. The application process for a personal loan isn’t as in-depth as applying for a home equity loan or HELOC, and personal loans are generally disbursed the same day or in a few days’ time. Some lenders may market personal loans as swimming pool loans or home improvement loans, so be aware of that as you compare options.

With a home equity loan, homeowners take a loan against the equity accumulated in their home as they’ve paid down their mortgage. Home equity loans are secured by your home as collateral, so you could lock in a lower rate than what you’d get with an unsecured loan. Your lender can put a lien on your home if you fail to make your monthly payments, though. Many lenders let you borrow up to 80% or 85% of your total equity as a lump-sum loan with a fixed rate, and repayment terms can be as long as 30 years.

The process of applying and getting approved for a home equity loan is similar to that of a primary mortgage, so expect an in-depth process if you choose to finance your pool using your home equity. Lenders will require a home appraisal and review of any current liens on your house before determining if you’re approved. You’ll also likely need decent credit to qualify. Home equity loans have a longer disbursal time frame; loan funds are generally disbursed in a few weeks to a couple of months.

A home equity line of credit (HELOC) is a revolving line of credit that you can use for major purchases, including home upgrades and repairs and yes, swimming pool financing. As with a home equity loan, your home serves as collateral. One advantage of a HELOC is that you can draw on it as needed, as you would with a credit card, and only pay interest on money you use.

Like home equity loans, HELOCs are secured by your home and have a detailed application process and a longer disbursal time than personal loans. They also offer relatively low variable rates. You’ll typically need good credit to get approved for a HELOC. If approved, you’ll receive a total credit line you can borrow against as needed within a draw period, typically up to 10 years.

HELOCs are a popular financing option due to their low rates (compared to other options) and flexibility. A HELOC may be a wise choice, for example, if you don’t know exactly how much your pool project will cost.

With this option, you apply for financing through your pool contractor (who actually partners with a third-party lender) and repay your balance with interest over an agreed-upon term.

This type of unsecured financing generally comes with a higher interest rate than what you’d see with a HELOC or home equity loan. Approval requirements and funding times will vary depending on your contractor and the type of financing and payment options they offer.

If you plan to install an above-ground pool, a credit card with a 0% introductory APR on new purchases is worth considering. This type of card offers a 0% rate for a set period, often 12-18 months. You could theoretically charge the entire cost of your pool project to the card and pay it off with no interest.

Just ensure you can repay your full balance during this time, as the card’s regular APR will apply afterward. Credit cards generally have much higher rates than other types of financing, so your interest costs could get expensive if you fail to pay off your card during the introductory period.

You’ll generally need good credit or excellent credit to get approved for a 0% introductory APR credit card. Your credit limit will vary depending on your creditworthiness. After approval, you’ll typically receive a new credit card in the mail within 5-7 business days.

compare personal loan rates

Before you shop around for a loan or credit line, consider your financial situation and the cost of your project so you settle on the best pool loan.

If you have good credit and your pool installation will cost around $65,000, for example, a home equity loan or HELOC may be the best choice. If you need funds more quickly, consider a personal loan or contractor financing instead. Those options typically have quick application and approval processes.

Before you settle on a specific lender, compare options from multiple online lenders, banks, and credit unions. Look out for fees, prepayment penalties, and other costs before signing a contract.

When applying for financing, lenders will typically run a hard credit check and review your credit history. You’ll need to provide lots of personal and financial information, including your Social Security number, proof of identity, such as a copy of your driver's license, proof of income (W-2s or tax returns) and copies of bank statements.