A pool loan is a lending product that covers the cost of installing a pool. Because the average cost of a pool ranges from $28,000 to $55,000, most people can't afford to pay for it outright and need to finance the purchase.
A report from the National Association of Realtors found that pools only have a 43% ROI—much lower than other upgrades like landscaping or a new deck—so homeowners should only add a pool if they intend to use it regularly, not to increase the home's value. However, if you’re interested in installing a pool, we researched over a dozen lenders and evaluated them based on rates, ease of application process, loan terms, and other factors to help you make the best choice for your pool loan.
The 5 Best Pool Loans of 2021
Best for Low Interest Rates: LightStream
We picked LightStream as best for low interest rates because they offer the lowest interest rates and fees of any personal loan provider we evaluated. A division of SunTrust Bank, now Truist, Lightstream is one of the most popular personal loan providers on the market. Their personal loans have a wide range of terms, from two to 12 years.
LightStream offers a .5% interest rate deduction with automatic payments, and there are no prepayment penalties. Borrowers from Florida will have to pay an additional Documentary Stamp Tax, which is not factored in the APR.
LightStream also claims to beat competitor’s rates and will give you a .10% rate decrease if you’re approved for a lower rate by another lender. They also promise to give unsatisfied customers $100 if you complete a questionnaire detailing their experience.
LightStream also offers auto refinance loans, auto loans, and other types of loans.
|Loan Terms||24–144 months|
|Fees||No prepayment penalties|
|Time To Receive Funds||Funds are available same day|
|Recommended Credit Score||Good to excellent credit|
Best for Extra Benefits: SoFi
Founded in 2011 as a student loan refinancing company, SoFi has grown into a large online lender, offering investing products, insurance, and loans. We picked SoFi as best for extra benefits because they offer many extra benefits and perks that other lenders don’t, such as personal loans with high limits as well as fixed and variable rates.
SoFi offers a .25% interest rate discount if you choose autopay, and they don’t charge late fees on personal loans. They also don’t charge origination or prepayment fees. SoFi also offers live customer support every day of the well as well as a mobile app, available for both Android and iOS devices, that you can use to apply for a personal loan. Note, however, that cosigning is not allowed for SoFi personal loans.
SoFi also has a special unemployment protection program that includes deferment options for borrowers who lose their jobs. Loans can be deferred for three-month periods and up to 12 months total. They also provide career coaching and resume editing services if you've lost your job.
|Loan Terms||24–84 months|
|Fees||No origination or prepayment penalties|
|Time To Receive Funds||Within a few days|
|Recommended Credit Score||N/A|
Best for Bad Credit: Upstart
According to the website, Upstart is an AI-driven lending platform that is “designed to improve access to affordable credit while reducing the risk and costs of lending for its bank partners.” We picked Upstart as best for bad credit because it has a lower minimum credit score requirement than its competitors, making it a better choice for those with poor credit. Upstart claims that it has 27% more approvals than “traditional models.”
Upstart doesn't provide loans directly. Instead, it partners with various banks and connects borrowers to the right lending option. It generally offers three and five-year personal loans with APRs ranging from 8.27% to 35.99%, with the average APR for a three-year loan at 24%. Upstart claims that funds are disbursed within one business day 99% of the time. There is also no prepayment penalty.
Upstart provides shorter terms and lower loan amounts than other personal loan providers, partly because they focus on customers with less-than-ideal credit.
|Loan Terms||36 or 60 months|
|Fees||No prepayment penalties|
|Time To Receive Funds||The next business day|
|Recommended Credit Score||600|
Best for Home Equity Loans: Discover
In business since 1985 and most well known for its credit cards, Discover also offers a range of financial products including personal and home equity loans. We picked Discover as best for home equity loans because of its minimal fees, low interest rates, and high loan amount limits.
Home equity loans let you borrow against the extra equity in your house and use it for upgrades, such as a new pool. You must have a loan-to-value ratio of more than 80% to qualify, which will be determined by an official appraisal. Another benefit to home equity loans is that you can deduct the interest on your taxes, which is not available with personal loans. Home equity loans for a pool can be less expensive than a personal loan because they’re secured.
To obtain a home equity loan with Discover, you can apply online or over the phone, making it simple and convenient. After obtaining your loan, which comes with a fixed rate and monthly payment, you will not have to pay any closing costs associated with the loan; Discover pays all of those costs.
While there are technically no prepayment penalties, borrowers who repay the loan in full will have to pay some of the closing costs that were initially waived. These will not exceed $500.
|Loan Terms||10, 15, 20 or 30 years|
|Fees||No prepayment, application, origination, or appraisal fees|
|Time To Receive Funds||N/A|
|Recommended Credit Score||620 (or 700 for loans above $150,000)|
Best for Home Equity Lines of Credit: PenFed Credit Union
PenFed Credit Union is a federally-insured credit union serving members in all 50 U.S. states, Puerto Rico, Guam, and Okinawa. In addition to traditional banking products like checking and savings accounts, they also provide loans. We picked PenFed Credit Union as best for home equity lines of credit (HELOC) because of its low interest rates and minimal fees.
With a PenFed Credit Union HELOC, you can complete your application online for free. The amount of your loan and your rate depends on a variety of factors including your combined loan-to-value ratio (CLTV), which is related to how much equity you have in your home. The more equity, the lower your interest rate. PenFed accepts a combined loan-to-value-ratio as high as 90%.
PenFed Credit Union will pay most closing costs, and there’s a $99 annual fee that will be waived if you pay more than $99 in interest in the previous 12 months.
You can obtain a HELOC for your pool loan with PenFed Credit Union on owner-occupied and non-owner occupied homes.
|Loan Terms||10-year draw period and 20-year repayment period|
|Fees||$99 annual fee and appraisal fee|
|Time To Receive Funds||N/A|
|Recommended Credit Score||N/A|
What Is a Pool Loan?
A pool loan is a loan you take out to pay to have a pool installed at your home or rental property. Most people pay for pools using personal loans, home equity loans, or HELOCs.
A personal loan is an unsecured loan, which means there is no collateral backing the loan. If a borrower defaults on an unsecured loan, there's nothing for the lender to repossess. A secured loan has collateral, like a home equity loan or HELOC.
In general, interest rates tend to be lower for secured loans than unsecured loans. The downside to using a home equity loan or HELOC is that if you default, the bank can repossess your house. This won't happen if you have a personal loan.
Who Should Get a Pool Loan?
To pay for a pool using a personal loan, you generally need a credit score of around 600 or higher. Some lenders may also have income requirements, which will vary. Home equity loans and HELOCs often require a score of 680 or higher. You can still get a pool loan if you have a lower credit score, but you will pay higher interest rates, making your monthly payment higher as well.
If you can secure a good interest rate and afford all of the ancillary costs like maintenance and insurance, a pool loan might be a good idea. If you can’t afford the extra costs, or you have a significant amount of consumer debt or other financial obligations, you might want to wait until you’re in a better financial position to take out a pool loan.
How Much Do Pool Loans Cost?
The total cost of a pool loan depends on the interest rate, term, and your credit score. Before finalizing a pool loan, get quotes from a few different lenders to ensure you get the best rates.
Keep in mind that maintenance and repairs for a pool can cost between $3,000 and $5,000 a year. This will vary depending on your location, the size and type of pool, and whether you're hiring someone to do the work or if you’ll do it yourself.
You may have to purchase extra coverage on your homeowners insurance for the pool. Some people also choose to add separate liability insurance, in case a pool-related injury occurs.
How Long Do Pool Loans Typically Last?
Borrowers who use a personal loan to build a pool will have a term between two to 12 years. Those who use a home equity loan can have a term as long as 30 years, while a HELOC has a 10- to 20-year repayment period.
In general, loans with longer terms have higher interest rates and lower monthly payments than loans with shorter terms. When taking out a pool loan, borrowers have to decide between paying less interest with a shorter-term loan or having lower payments with a long-term loan.
Before borrowers decide on the term, they should consider what they can afford on top of regular pool maintenance, increased utility bills, and higher homeowners insurance.
How We Chose the Best Pool Loans
To determine the best pool loans, we looked at over a dozen personal loan, home equity, and HELOC lenders and evaluated them based on factors like fees, interest rates, customer service ratings, and total loan amounts. The ones on our list of best pool loans were selected due to their low fees, the easy online application process, and competitive interest rates and repayment terms. They also offered a range of loan limits, loans for people with good and bad credit, and quickly disbursed funds.
HomeAdvisor. "How Much Does it Cost to Own and Maintain a Pool?" Accessed December 18, 2020.