In residential areas, swimming pools can be a plus. They offer opportunities for enjoyment, relaxation, fitness as well as breathtaking views in your backyard. Aside from the advantages, swimming pools are costly. The estimated cost for inground pools is $25,700 and $29,600. On the other hand, the average costs for above ground pools go up to $100,000. There are many pool lenders determined to help you with your pool construction costs. In this article, we shall focus on some of the loan types available for swimming pool loans.
These unsecured loans are in most financial institutions, including banks, credit unions, and pool lenders. Personal loans are generally a good option for pool loans since they come with low rates and a broad spectrum of amounts. Additionally, they are payable within a reasonable period ranging from 2 to 7 years.
To meet the requirements of this loan, you have to have a high credit score and stable income sources. If you have a high credit score, the higher the chance of obtaining favorable and fixed interest rates of less than 10%.
Both types of loans require you to let your house serve as collateral. Unlike other types of loans, home equity loans grant you loans at lower rates and have a more extended period for repayment. Nonetheless, your home is at risk for foreclosure in case you fail to repay the loan.
This type of loan is best for people with a large amount of equity tied to their homes. Additionally, borrowers who are confident they will repay the loan and spend within their budget are eligible for home equity loans.
How does it work? Like any other loan, the first step is to apply for the loan. If your request becomes approved, the loan gets processed, and monthly installments begin in the next month. This goes on until completion of loan payment.
Home equity interest rates differ based on the pool lender. However, the average rate lies within 4% to 10%.
Unlike home equity loans, HELOCs have much higher interest rates with this type of loan, your request for money in a specific limit. Once granted, you are flexible to repay it; however, you choose within the loan term, which usually is 5 to 10 years.
Although they have higher interest rates, you cannot compare them with credit card loans and personal loans, especially if your credit score is low. Besides, the loan enables you to take the exact amount of money you require without spending more than you can afford.
Sometimes swimming pool dealers provide pool financing. However, compared to other sources of funding, this is the most expensive method. Swimming pool dealers frequently attract customers by offering monthly installments with no interest rates for a certain period. But if you do not make your payments during that time, they will charge you a much higher rate during the rest of the loan period. Even worse, they increase interest rates due to accruements during the introductory period. Consequently, this can inflict massive losses upon the borrower.
Before applying for a pool loan, carefully consider the advantages and disadvantages tied to it.
Before consulting a pool lender, it is essential to analyze your budget. Determine the amount you can afford to spend on pool construction costs. Also, identify whether the monthly installments are manageable.
It is also essential to know how much value the pool will add to your home if you can finance the pool construction costs without the help of pool lenders, the better.
After this analysis, you might think of constructing a smaller pool to save you on costs. Furthermore, it may not be worth it, especially if you live in northern locations that are snowy most of the time.
In conclusion, constructing a swimming pool is quite expensive. Therefore, before proceeding with the process, take time and see if it’s worth it. Also, employ strategic pool financing and repayment techniques. That way, you won’t have to worry about your paying off your loan.