Best Pool Loans | Money

Building a home swimming pool is expensive. A typical in-ground pool costs between $40,000 and $50,000, while a high-end luxury pool can cost up to $150,000. If you don’t have this kind of money on hand, you can look into financing the construction with a loan. The best pool loans provide a lump sum of cash you can use to pay for installing the pool, leaving you with smaller monthly payments you can make over a stipulated term — typically several years.

While banks, credit unions, online lenders and peer-to-peer platforms offer personal loans you can use to install a swimming pool, some online lenders like LightStream have specific loans for pools. These are great if you need the cash quickly. It typically takes a few minutes to apply and a few business days to receive the funds. But if time is not a factor, then there are several other pool loans to consider.

Our Top Picks for Best Pool Loans

Best Pool Loans Reviews

Why we chose it: Discover lets you take out a home equity loan even if you have an existing mortgage on the home. Available in amounts of up to $300,000, this financing option can provide enough funds for you to install any type of swimming pool.

A home equity loan (HEL) allows you to borrow money from a lender using your home’s available equity as collateral. This makes it a secured loan, and because of that, lenders are usually willing to offer high loan amounts. With the Discover home equity loan, you can borrow between $35,000 and $300,000 in one lump sum, provided your loan-to-value (LTV) ratio doesn’t exceed 90%. Often expressed as a percentage, the LTV ratio compares the total value of debt on a home (that is, outstanding mortgages and loans) to the home’s appraised value.

You’re eligible for Discover’s home equity loan if you have a credit score of 620 or higher. If you already have a mortgage on the house, this pool loan will be a secondary loan — otherwise known as a second lien loan. Although Discover’s second lien rates start at a higher point than first liens, the lender generally charges competitive fixed interest rates on its home equity loans.

Discover doesn’t charge application, origination, appraisal or closing fees, which makes it one of the most affordable loans for a pool. That said, Discover can still foreclose on your house if you default on its pool loan, even if you’re current on your first mortgage. (This is why home equity loans are riskier than other types of inground pool loans.)

Discover has repayment terms of 10, 15, 20 and 30 years. The longer the term, the lower your monthly payments will be, but you’ll probably pay significantly more in the long run, since the amount of interest you’ll owe will be higher.

The company doesn’t have prepayment penalties on its home equity loan, but you’ll be forced to reimburse the lender some of the closing costs (up to a maximum of $500) if you pay off the loan within six months of its closing. This doesn’t apply to borrowers in Connecticut, Minnesota, New York, North Carolina, Oklahoma and Texas. The process from applying for a Discover home equity loan to receiving funds takes 30 days or more, which is longer than what you’ll get with other lenders, particularly online and peer-to-peer lenders.

Other highlights

Why we chose it: Upstart is a peer-to-peer lending platform that connects borrowers with lenders directly, so they don’t have to go through traditional lending institutions like banks and credit unions. Its biggest draw is that you don’t need good credit — or any credit, for that matter — to qualify for financing. (The company’s underwriting process considers factors like education and employment history in lieu of credit history).

To be eligible for a loan, your LTV ratio — excluding rent or mortgage — should not exceed 50% (or 45% if you live in Connecticut, Maryland, New York or Vermont). There shouldn’t be any material changes in your credit report between the time you apply for an Upstart loan and when the funds are disbursed. Additionally, you shouldn’t have any bankruptcies or public records in your consumer reports within the last 12 months. Your credit report should not have any current delinquent accounts, and there shouldn’t be more than six inquiries on the report within the last six months.

Upstart loan amounts range from $1,000 to $50,000. Terms are either three or five years, and the minimum interest rate is competitively low. You can pre-qualify with a soft credit check and confirm the rate you qualify for in under five minutes on the company’s website. One caveat: you can’t add a co-signer to get a lower rate.

The company doesn’t have prepayment penalties, but it does charge several other fees. These include:

• A one-time origination fee that’s a percentage of the loan amount

• A late payment fee of $15 or 5% of the amount due, whichever is greater

• A check refund or ACH return charge of $15 for any transaction that can’t be completed

• A $10 charge whenever you request paper copies of documents

Other highlights

Why we chose it: LightStream’s maximum interest rate is significantly lower than what you will get from other pool loan lenders. The company charges a fixed rate, so your monthly payments will remain the same through the entire term of the loan.

LightStream doesn’t list a specific minimum credit score requirement on its website, but the company does require applicants to have a good credit history that includes a variety of accounts like credit cards, car loans and installment loans. LightStream also checks your liquid assets — including retirement and investment savings — when determining your creditworthiness. You must prove that you have a stable income that’s sufficient to repay your new loan in addition to any current debts you may have. And your credit report must have few, if any, delinquencies.

LightStream’s minimum and maximum interest rates are lower than what most other lenders offer, with the lowest rates reserved for the most creditworthy borrowers. The company has a pool loan calculator on its website you can use to check the APR you qualify for based on your credit profile, loan amount and loan term. The loan application process is entirely online — there are no options for in-person, phone, email or fax applications.

LightStream doesn’t offer loan pre-approval, but you’re not obligated to accept the loan when your application is accepted. Still, if 30 days pass before you accept the funds, the approval expires, and you’ll have to apply again. Another downside: Once the funds are disbursed to your account, you can’t change your payment dates.

LightStream loan amounts range from $5,000 to $100,000, with repayment terms of two to 12 years. The company doesn’t charge origination, prepayment or late payment fees.

Other highlights

Why we chose it: The Navy Federal Credit Union is an approved VA lender that offers low interest rates for secured personal loans and competitively affordable rates for unsecured home improvement loans — both of which you can use to install a home swimming pool.

VA loan swimming pool requirements are relaxed when you’re using the loan as a first lien.This makes it a great option for buying a property with a pool. But if you want to add a pool to a home you already own, Navy Federal Credit Union may also be a good option.

You’re eligible to join the Navy Federal if you’re a veteran or service member. Immediate family and household members of veterans and service members can also join.

The most affordable pool financing option is the savings secured loan, which comes with a term of up to five years. Navy Federal uses your savings account as collateral, so when the loan is approved, the company freezes an equivalent amount of savings. The funds will become available again as you pay off the loan. You can opt for a longer loan term of up to 15 years, although this will come with a higher interest rate.

If you prefer an unsecured pool loan that doesn’t impact your savings, you can opt for Navy Federal’s home improvement loan. It has no collateral requirements, but interest rates start at a higher point. The minimum loan amount is $25,000.

Navy Federal also has a personal expense loan with amounts ranging from $250 to $50,000 and terms of up to five years. There are no restrictions on how you can use this loan, which means that you can use the funds to finance a swimming pool.

Navy Federal doesn’t publish its minimum credit score requirement, although borrowers with a FICO of at least 670 stand to get the best interest rates. The credit union also offers same-day funding for approved applications. Regardless of the pool loan you choose, Navy Federal doesn’t charge any origination or prepayment fees.

Other highlights

Why we chose it: SoFi’s personal loans start at $5,000 and max out at $100,000. That makes it an excellent choice for borrowers who are looking to build a high-end luxury pool, which can cost $100,000 or more.

SoFi considers a number of factors during underwriting, including your credit score, financial history and debt-to-income ratio (DTI). However, the company doesn’t specify the exact credit score and DTI values that will qualify you for a loan. If you already have a SoFi loan, you can qualify for a second if you’ve made at least three timely payments on the first.

SoFi personal loans come with terms of two to seven years and a fixed interest rate that depends on your creditworthiness, loan amount and the pool loan terms. Generally, the best rates are reserved for borrowers with high credit scores. You can use the company’s swimming pool loan calculator to check the rate you qualify for. This will be a soft credit check that won’t impact your credit score.

SoFi allows borrowers to pre-qualify in 60 seconds with no obligation to accept the loan. If your application is approved, you can get the funds on the same day. This short processing time makes SoFi one of the best pool loan companies for borrowers who need immediate financing.

Other highlights

LendingPoint

LendingPoint doesn’t mention a minimum credit score requirement on its website. If you meet the company’s basic eligibility criteria, you can pre-qualify on LendingPoint’s website.

The lender offers loan amounts from $2,000 to $36,500 with terms of two to six years. There’s an origination fee charged as a percentage of the loan amount. Once approved, you may get funding within one business day.

Why LendingPoint didn’t make the cut: The maximum amount you can borrow from LendingPoint is $36,500, which is less than the average cost to construct an in-ground swimming pool.

Universal Credit

Universal Credit offers personal loans with amounts that start from $1,000 to $50,000. While this is generally a sufficient loan for pool construction, it comes with a comparatively high interest rate. Repayment terms start from three to five years, and there are no prepayment penalties.

Universal Credit charges an origination fee that’s a percentage of the loan amount. Once approved, you can get the funds in one business day.

Why Universal Credit didn’t make the cut: Universal Credit’s personal loan is costly. Interest rates are higher than what other pool loan lenders offer. The fact that borrowers also have to pay a high origination fee makes this loan even more expensive.

Alliant Credit Union

Alliant Credit Union offers personal loans with terms that include one, two, four and five years. The company allows you to borrow anywhere between $1,000 and $100,000. According to its official website, Alliant offers same-day approval and same-day funding in most cases.

Although you can apply for a loan even if you’re not a member of Alliant Credit Union, you must register as a member to receive the funds. You can get pre-approved on the website (before signing up for membership), although this will trigger a hard credit inquiry.

Why Alliant Credit Union didn’t make the cut: With personal loans, Alliant conducts a hard credit inquiry when you check the rate you qualify for. This can negatively impact your credit score, and it doesn’t guarantee that you will get approved for the loan. The company’s interest rates are also higher than what you can get from many other pool loan lenders.

Pool Loans Guide

What is a pool loan?

A pool loan is either a secured or unsecured loan you can use to construct or install a swimming pool. While most lenders provide this financing in the form of a personal loan, lenders such as LightStream have specially created loans for financing a pool.

How do pool loans work?

A pool loan provides a lump sum of money upfront you can use to construct your pool. You will pay back the principal amount and interest on a schedule (usually monthly) over a period of time — typically years.

Proceeds of a pool loan can be used to finance several pool-related expenses, including excavation, installation and landscaping. If the loan is secured, you will need to put up some collateral, such as a car or home. On the other hand, unsecured pool loans do not require any collateral.

How to get a pool loan

The process of getting a pool loan starts when you approach a swimming pool builder and ends when you pay off the pool loan. Here’s a breakdown of how to go about it.

Get a pool estimate

Choose a reputable pool builder, ideally one who operates in your locality and understands the legal and environmental requirements of installing a pool. Make sure to check their references (such as online reviews), qualifications, experience, warranty of service and after-sale services. Part of maintaining a pool is having one of the best pool cleaners on hand, so you’ll want to include that cost in your budget too.

Once you’ve settled on a contractor, specify exactly what you need. This includes any extra features you want, such as special customizations, a hot tub or pool lighting. Let the contractor create a pool estimate based on your requirements.

Look for reputable lenders that have a pre-qualification process

Pool loans are typically offered by banks, credit unions, online lenders and peer-to-peer platforms. Loans from banks and credit unions generally offer large amounts but are harder to qualify for. Getting the funds can also take longer.

Online lenders and peer-to-peer platforms tend to have relaxed lending terms, but their maximum interest rates are usually high, which can make their loans costly to borrowers with bad credit. But they offer quick financing — typically same-day approval and funding within one or few business days.

When vetting lenders, prioritize those with good reviews and ratings, then list three to five that you prefer. Check that you meet their eligibility requirements and then pre-qualify for the amount you need. Make sure the lenders you pre-qualify with don’t do a hard credit check during this step because it can lower your credit score.

Compare fees, loan terms, and interest rates

Compare the interest rates, lending terms and fees of the lenders you prefer. Choose a pool loan with fees and rates that are manageable based on your monthly income. Otherwise, you risk defaulting on the loan and damaging your credit. Additionally, look at the lender’s terms, including prepayment penalties, late payment charges, co-signer options, maximum loan amounts and prepayment duration.

Generally, the less stringent a loan’s terms, the easier it is to handle. For example, a loan that allows a co-signer, doesn’t have late payment charges and allows you to repay over a long term can be easier on your finances. Pick one lender offering rates and terms that suit your current and short-term financial situation.

Submit your pool loan application with the required documentation

Most lenders allow borrowers to apply for loans online. Gather the necessary documents (these will be detailed on the lender’s website) and submit your application. With personal loans, online lenders will typically provide a response within minutes and funds in one or two days. Traditional banks and credit unions take longer, but the entire process shouldn’t take more than five business days. That said, some types of loans, such as home equity loans, can take up to 90 days.

How We Chose the Best Pool Loans

We considered the following factors when selecting the best pool loans:

• Loan amounts: We looked for companies that offer loan amounts that would be sufficient to finance the cost of an inground pool.

• Interest rates: We compared minimum and maximum interest rates to get an idea of each company’s affordability.
• Fees: To further check each loan’s affordability, we looked at additional charges imposed, including origination, late payment and prepayment fees.

• Repayment terms: Since the term of a loan determines its monthly payments, we considered lenders who offer flexible terms that range from a couple of years to several years.

• Credit score requirements: Many lenders use credit scores to determine the creditworthiness of borrowers and interest rates of loan products.

• Eligibility criteria: We looked for lenders who have relaxed qualification requirements – including a low income and high DTI – for their pool loans.

• National availability: We only selected companies that are available nationwide.

Summary of Money’s Best Pool Loans