This article covers the basics of what you need to know about getting a home improvement loan to finance pool construction on your property, including rates, terms, and requirements.

What Is a Swimming Pool Loan?

swimming pool loan is any loan used specifically for the purpose of installing a pool. A pool loan gives you the necessary funds for building a pool upfront and lets you pay for it over time while you enjoy all the fun and increased property value that go along with having a coveted backyard oasis. Pool loans help homeowners cover costs for:

  • Yard excavation.
  • Installation.
  • Pool liners, pumps, equipment, and other materials.
  • Landscaping.

There are almost as many pool financing options as there are shapes and sizes of pools. So let’s dive into some common ways that homeowners finance their new pools.

Types of Swimming Pools Loans

Here are some of the best options available if you are looking for ways to finance your swimming pool:

Cash-Out Refinance

A cash-out refinance lets you replace your current mortgage with a new, larger loan. If you’ve gained equity in your home, you could take out the difference to fund your new pool.

The benefit of a cash-out refinance is that you have the potential to make lower mortgage payments while getting cash for your pool at the same time. The downside is that you will need to go through the full mortgage process again to qualify. It also requires you to pay closing costs that can total anywhere from 2% to 5% of your loan. If you haven’t been in your home long enough to build equity, you may not be able to tap into the full benefit of this option.

Home Equity Line of Credit

A home equity line of credit (HELOC) lets you establish a revolving line of credit by pulling equity from your home. The perk here is that you only pay interest on the amount you need to borrow to pay for your new pool. You’ll also have several years to pull out funds for other home improvements if you choose to. HELOC approval tends to be speedy compared to other loans, but a conventional HELOC only benefits a homeowner who has lived in a home long enough to build equity.

Home Equity Loan

A home equity loan is a second mortgage that lets you borrow cash against the value of your home. Unlike a HELOC that provides a line of credit that you can access at any time during a draw period, a home equity loan delivers a lump sum of cash upfront to finance a new pool. Also unlike a HELOC, it has a fixed interest rate versus a variable rate, which means predictable monthly payments.

Personal Loan

If you’d prefer not to use home equity for financing, a personal loan is an unsecured loan option that also provides a lump sum that you can use to pay for your new swimming pool. While some people like the idea that personal loans don’t use their home as collateral, the downside is that interest rates on a personal loan for home improvements are higher compared to equity-based loans for this same reason.

What Are the Steps for Financing a Pool?

First, determine how much you’ll need to borrow to finance your new pool. Here’s how to prepare to apply:

  • Get a solid estimate from your pool builder.
  • Compare rates and repayment structures from different loan options.
  • Compare how repayment plans will impact your short- and long-term budget plans.
  • Apply for the loan.

It’s important to only apply for a pool loan once you’re confident that you’ve found the right loan option. Like any mortgage application, a pool loan application will result in a hard pull of your credit history that can temporarily lower your score.

Most lenders require a borrower to have a minimum credit score between 600 and 680 to qualify for a home improvement loan for a pool. If you’re using home equity to finance the construction of your new pool, the minimum may be closer to 720.

How to Apply for a Swimming Pool Loan

As previously, getting approved for a pool loan starts with getting an estimate from your pool builder. You can use that estimate to narrow down lenders offering the loan size you need. Some lenders will ask you to go through a prequalification process that’s similar to a mortgage process. This gives you a chance to view potential home improvement loan rates and terms without taking a hit to your credit score. Here are the key factors to look for:

Loan type: Does the lender offer loans large enough to cover the cost of your new pool?

  • Borrower requirements: Do you meet the lender’s requirements for minimum income, credit score, and debt-to-income (DTI) ratio?
  • Loan affordability: Does the annual percentage rate of a loan keep the cost of pool payments within your monthly budget?
  • Repayment terms: Lenders offer loans with repayment periods that range from weeks to months, so it’s important to know that pool loans with longer terms can often cost more in interest.

Once you submit your application, it could take anywhere from a few hours to a few weeks to hear back from a lender. If they approve your loan, you can use the financing you receive to pay your pool builder. Check out our home improvement loan calculator to get a better idea of what you’ll be able to borrow for your project. 

FAQ About Home Improvement Loans for Pools

Here are a few of the most commonly asked questions people have about home improvement loans for pools: 

How much does a pool cost?

The cost of installing a swimming pool can vary widely depending on the type, size, and materials used. On average, an in-ground pool can cost between $35,000 and $65,000 for basic construction. However, higher-end pools with custom designs and additional features like waterfalls or hot tubs can raise the price significantly, often exceeding $100,000. Above-ground pools are generally less expensive, typically ranging from $1,500 to $15,000.

Is financing a pool a good idea?

Financing a pool can be an excellent idea for homeowners looking to enhance their property’s value or their lifestyle while living in their home. At RenoFi, we believe that a well-planned pool investment can open doors for subsequent home improvement projects. With various financing options available, from a personal loan to a home equity loan, homeowners can choose a method that suits their financial situation. Interest rates for pool loans are often competitive, making them an accessible choice for many.

What factors should I consider when choosing a pool loan provider?

The goal when finding a home improvement loan for a pool is to select the loan provider that offers the most affordable financing option. Interest rates, loan terms, and additional fees all ultimately contribute to the total cost of the project beyond what your pool contractor charges. The length of the loan also plays a big role as longer loan terms often result in more interest payments over time.

What are the advantages of using a home improvement loan over other financing options?

A home improvement loan provides flexible payment options that allow you to make affordable monthly payments to cover a pool that may cost thousands of dollars. There’s also a little-known tax benefit tied to these loans that could help you to save money as well. If you’re installing a pool at your home for certain medical reasons, you may be able to write off all expenses associated with installing and maintaining the pool.

What are the typical credit score and income requirements for pool loans?

Providers determine borrower requirements based on the amount of risk they are willing to take on when extending loans. Lenders reserve the best interest rates for borrowers with credit scores in the excellent (800+) to very good (740 to 799) ranges. While most lenders do offer loan products to people with lower credit scores, these loans will have higher interest rates and fees. Income requirements for loans are generally based on loan size. In addition to looking at income, lenders look at the DTI ratio that divides all monthly debt payments by a borrower’s monthly gross income.

Choosing the Right Lender for Your Pool Loan

When building a pool, you can choose to either benefit from your home’s equity to snag a lower interest rate or opt for a personal loan that doesn’t put your property at risk as collateral. You can do this using a traditional bank, alternative lender, or your pool builder’s financing options. If you don’t have equity in your home yet, a RenoFi Loan lets you borrow against your home’s future value to boost how much you can borrow significantly, instead of waiting years to save up for the pool you really want.

RenoFi Loans are some of the best home renovation loans on the market that offer numerous advantages to homeowners. With boosted borrowing power, homeowners can leverage their home’s estimated after-renovation value, allowing them to borrow more than 11 times the average amount. Additionally, RenoFi Loans offer the lowest rates available, comparable to traditional home equity loans, HELOCs, or a cash-out refinance. Compared to personal loans or credit cards, RenoFi Loans provide a cost-effective solution for financing pools. 

RenoFi Loans also come with lower fees, making them more affordable compared to first mortgages. Unlike other home renovation loans, RenoFi Loans eliminate the need for a disbursement schedule, streamlining the process for both homeowners and contractors. From adding a pool to undertaking a complete home remodel, RenoFi Home Equity Loans are suitable for projects of all sizes.

The big takeaway when shopping for a loan for a pool is to remember that your interest rate and terms directly impact the true overall cost of your new pool. That’s why it’s important to do your homework to explore all options and requirements.

RenoFi Loan Comparison Chart

RenoFi Pool LoanLets you tap into your home’s future value without refinancing your current mortgage.
HELOCRequires you to wait until you’ve accrued enough equity to cover your new pool’s construction costs. However, a RenoFi HELOC, which also taps into the after-renovation value of your home, can help you increase the amount of your loan even with less equity. 
Cash-Out RefinanceRequires you to refinance your current mortgage at what could be a higher rate than your existing one.
Construction LoanRequires you to pay closing costs while navigating a lengthy and complex draw schedule. 


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