Pool Loan Calculator

With the advent of social distancing, the way we enjoy our leisure time has changed significantly. Restrictions on going to public beaches, limitations at public pools and country clubs means it’s getting harder and harder to find a respite from the summertime heat. As a result of this, one area that has seen a significant boom during this crisis, is the area of home improvement projects, with pool installations leading the way.

Deciding on the kind of pool that you want for your house is no easy task. Whether a relatively simple above ground pool, or an elaborately crafted lagoon, it all depends on what your dream is, and the budget you have to put to work. There are at least two television shows that are based upon the elaborate and unique designs of pools and the projects entailed to create them.

pool loan estimate

Building your own private oasis does come at a cost. In some cases, depending upon the extent of the project, the swimming pool can run almost the cost of the house itself. However, for more mainstream pools that aren’t geared to rivaling pools at top hotels, the cost of putting in a pool is well within reach. Plus in the current low interest environment, loans designed for pools present a cost effective option.

How Does Getting a Loan for a Swimming Pool Work?

Financing the pool of your dreams is easier now than ever. In most cases, it can be an unsecured term loan, meaning that no equity is required. There are lenders in all fifty states, so if you live in a cold weather state and want a heated indoor pool, or live in a warm weather state and need a place to cool off, there are options available! Typically the rates are low, fixed costs, without having any prepayment penalties if paid in full.

Often, the company that is installing your pool will offer options to finance through them, via a bank relationship they have in place. Unfortunately, these loans typically run at a higher rate.  They have the benefit of not putting your home in jeopardy if you fail to make payments. The approval process is also quicker than typical loans through the pool company. Given the current rate environment, the best option may be a Home Equity Line of Credit (HELOC) because that guarantees the lowest possible rate and uses your house as the security.

Is it Worth It?

The addition of a pool is a very personal decision. There is no guarantee that it will increase the value of your property.  In some towns, you may be required to put up special fencing at an additional cost around it to mitigate any potential risk to neighbors. Often people assume the cost of the pool installation is the only number to worry about and don’t budget appropriately. Maintenance can become very costly and needs to be factored into monthly costs. A HELOC is beneficial because of the longer terms and lower payments to help offset monthly maintenance costs.

Another benefit of the HELOC versus an unsecured home improvement is the flexibility to change the design or details off your plan, once it’s under way. You won’t have to show updated details of the project to ensure it conforms to the details of the original loan. Just keep in mind, that your house is backing the loan and that costs need to be monitored. If missing payments becomes a problem, your house is at risk.

Unsecured personal loans can be easier to obtain and offer fairly aggressive rates. Additionally, they can be used to cover all aspects of the project, including construction, fencing, and maintenance.

Pool Loan Application Process

In order to apply for a pool loan, the logical first step is determining how much money you will need, and understanding your budget.  Basic in ground fiberglass pools begin around $15,000, with concrete and granite pools well exceeding the $50,000 mark. This does not take into account the costs of heating, lighting, or fencing. Additionally, if you want a special deck or cabana for changing and lounging, the numbers jump significantly, hence careful consideration of your budget and financing options is required.

Depending on your credit score, applying for an unsecured personal loan is the easiest path. There are numerous online lenders available, the process is a simple online application, and if approved, money will hit your account within a few business days.

A HELOC (home equity loan) will give you the most favorable monthly payment terms due to the length of the loan available. The amount you qualify for is based upon the amount of equity available in your home. While a HELOC offers the most favorable terms, typically, they take the longest for approval; upwards of 30 -45 days. Once you are approved, you can draw down as much as you need on the line of credit at any time, rather than having to take it all at once.

Home improvement loans require the most in depth levels of scrutiny. Proof of income, debt / equity ratios and all paperwork regarding your mortgage are required. Additionally, the pool design plans will be evaluated and you cannot stray from them once you get approved.

Here’s some sample monthly payments on your pool loan:

  • Loan amount: $30,000
  • Interest rate: 4%
  • Period: 15 years
  • Monthly payment: $222
  • Loan amount: $40,000
  • Interest rate: 5%
  • Period: 10 years
  • Monthly payment: $424
  • Loan amount: $15,000
  • Interest rate: 3.5%
  • Period: 20 years
  • Monthly payment: $87

Use the pool loan calculator shown above to calculate your monthly payment.

Loan Repayments

Because of the length of terms for a HELOC (anywhere from 10 – 30 years) the monthly payments are the most manageable. Additionally, you are only paying interest on the amount of money you draw down. The APR rates are also the most favorable, anywhere from 3% to 5%.

Home improvement rates can have APRs ranging from 5% to 30% depending on the terms, which puts them in line with many credit cards. Additionally, the loan terms are much shorter, and there is no prepayment penalty in most cases.

Conclusion

A HELOC may be the best way to pay for the pool of your dreams. In today’s environment it pays to shop around and get the best rates available. The key is understanding your budget and all of the hidden and associated costs with installing your own swimming pool, in order to make those dreams a reality.