How to Finance a Pool: 6 Ways to Pay for This Popular Home Upgrade

Pools provide a refreshing retreat away from the hustle and bustle of daily life, so it’s easy to understand the appeal of owning one. But before homeowners can dive headfirst into pool ownership, they will want to determine how to finance their pool purchase.

Pool financing can be found in many forms, ranging from personal loans to home equity loans, so homeowners may want to consider one of the best pool loans to find the option that is best suited for their needs. To find the right funding, borrowers can begin with this guide on how to finance a pool.

Before You Begin…

Prior to installing a pool, homeowners will want to consider several factors, including the costs and responsibilities that come with this type of purchase. To choose from the best pool installation companies, homeowners will need to understand the size, shape, and type of pool they desire. Although the addition of a swimming pool can increase the value of their home, the value added will depend on each of these factors, so choosing the right pool is important.

Before they apply for pool financing, homeowners will also want to take into account their overall financial health, including their credit score, to determine if now is the best time to take on additional debt. Finally, to get the best deal on their financing, prospective borrowers will want to compare pool loan rates across lenders, choosing the financing option that best aligns with their budget and financial background.

STEP 1: Determine how much you need to borrow to build your dream pool.

There’s no question that pools can be an expensive investment, from initial installation to regular maintenance. The average cost to build a pool is $36,000, though exact costs can vary depending on the size and style of the pool, among other factors. For example, building a lap pool costs more than a standard pool, with an national average cost of $44,000.

There will also be differences in cost between inground pool financing and above-ground pool financing. Above-ground pools typically cost between $700 and $5,000 and last for an average of 10 to 20 years. Inground pools, on the other hand, cost between $41,750 and $80,000 and last between 20 and 30 years. Homeowners seeking custom pools with luxury add-ons will pay even more, with prices increasing to $125,000 and beyond. To set their budget and choose the best financing option, borrowers will want to build their plan and consider their costs ahead of time.

STEP 2: Consider financing your pool with an unsecured personal loan.

Personal loans present one option for financing swimming pools. With a personal loan, borrowers receive a lump sum of money, which is repaid in monthly installments over a term lasting 1 to 7 years in length. Personal loans might be a good option for borrowers who don’t have enough equity in their home to cover the cost of a pool. These loans are typically unsecured, meaning no collateral is required to secure funding. To qualify for a personal loan, borrowers must generally meet certain credit, income, and debt-to-income requirements. Specific qualifying criteria will vary depending on the lender and the size of the loan, which can range from as little as $1,000 to as much as $100,000.

“The best option for financing is tied to home equity,” explains Tony Caciolo, the president of Monogram Custom Homes and Pools in Central Valley, Pennsylvania, who has spent more than 30 years helping customers navigate the pool-purchasing process. “But many homeowners don’t have enough equity in their home to utilize this lower cost-type loan, so they must obtain a non-secured loan.” While the best interest rates and highest loan amounts may be reserved for borrowers with good to excellent credit, personal loans can provide a fast financing option for homeowners who may not qualify for other pool loan options.

STEP 3: Borrow from your home’s equity using a home equity loan.

Financing for a pool can also come in the form of a home equity loan. Home equity refers to the amount of the home owned by the homeowner, built up over time through their monthly mortgage payments. With a home equity loan, homeowners can tap into their equity to fund home improvement projects, including the construction or installation of a pool.

Home equity loans are a type of second mortgage, handing homeowners a lump sum of money that is repaid in fixed monthly installments. The best home equity loans (such as one from U.S. Bank or Flagstar Bank) tend to offer more affordable interest rates because the home is used as collateral, minimizing risk for the lender and allowing for more flexible loan terms. For this reason, home equity loans may be one of the best pool financing options, assuming the homeowner has built up enough equity to cover their expected costs.

STEP 4: Look into a home equity line of credit (HELOC) to help pay for your pool installation.

Homeowners who are interested in using home equity to finance their pool, but who are unsure about the specific costs they can expect, may instead want to consider a home equity line of credit (HELOC). The best HELOC lenders allow homeowners to borrow against their home equity, using the home as collateral on the loan, which is similar to a home equity loan. However, home equity loans and HELOCs have a few key differences, including both the way homeowners receive and the way they repay their funds.

HELOCs function similarly to other credit lines, allowing homeowners to borrow up to a certain amount during what is referred to as the draw period. This period typically lasts around 10 years, during which borrowers can draw money from their credit line as needed. When the draw period ends, the repayment period commences and homeowners begin making payments. It’s worth noting that while home equity loans have fixed interest rates, HELOCs come with variable rates, which means costs could potentially increase throughout the loan term. However, these lines of credit may be easier to qualify for than other financing options, and as an added perk, homeowners won’t have to worry about making payments on their loan until the draw period has ended.

STEP 5: Consider a cash-out refinance as a pool financing method.

Also similar to a home equity loan, a cash-out refinance allows homeowners to borrow against their home equity to fund a large purchase or life event. But unlike a home equity loan, which homeowners must repay alongside their monthly mortgage payment, a cash-out refinance allows homeowners to refinance their current mortgage into a larger one, receiving the difference in cash. Homeowners can typically borrow up to 80 percent of their home equity with a refinance from one of the best mortgage refinance companies, such as PNC Bank or Caliber Home Loans.

But before pursuing a cash-out refinance, homeowners will need to understand that refinancing will change more than just their loan amount—it will also impact their interest rates. This means homeowners will want to consider the state of the housing market before choosing this option; otherwise, they could find themselves paying more than is necessary in interest over the course of the loan. On the other hand, with the right timing and lender, a cash-out refinance could allow homeowners to access the funds required to finance their pool while also securing a lower interest rate on their primary mortgage.

STEP 6: Ask about contractor financing when getting a quote.

Some independent contractors may offer swimming pool loans with flexible, convenient terms, but these loans are typically made in partnership with a lending institution, which means loan amounts, interest rates, and other terms can vary widely between companies.

Caciolo notes that while some contractors may offer this flexible financing, other builders may not be willing to take on the financial risk involved. “For larger, custom pools, most custom builders don’t have the ability nor would they want the risk of financing such a large project,” he explains. “There are also tremendous regulations when a project like this is financed, so most builders leave that portion to the banks that specialize in this.” Because this is a less-common financing option, homeowners who successfully find contractor financing will want to closely examine the terms and conditions of their loan to be sure they are getting a fair deal.

STEP 7: Check to see if the pool manufacturer offers financing.

Similar to contractor financing, some pool manufacturers offer financing options customers can use to obtain quick, convenient funding as a direct part of their pool purchase. These agreements are typically facilitated by a third-party lender, though pool payments are made directly to the manufacturer.

But like loans from independent contractors, manufacturer financing can differ greatly between companies, so homeowners will want to closely consider their options before making a commitment. And while some homeowners may be drawn to the convenience of this type of financing, those seeking it will want to be aware that not all companies offer pool payment plans, so they’ll want to be prepared to compare multiple manufacturers and pool financing companies before making their purchase.

To choose the best financing for their unique needs, borrowers will want to weigh their options carefully, considering different types of home improvement loans to fund their pool purchase. Before financing a pool, Caciolo reminds homeowners to consider whether the up-front costs and interest they will pay will be worth the value of the pool.

“And [that] value can be more family time at home, fun for the kids, or even creating a more relaxing environment,” he notes. “Some customers look at it as similar to the cost of joining a private club or country club. But rather than paying another organization, they are paying a bank to create their own private country club in their backyard.”