Best Pool Loans of 2023

» MORE: Best personal loans for home improvement

What is a pool loan?

A pool loan is a personal loan you receive in a lump sum and repay, with interest, in fixed monthly installments.

The pool isn’t collateral for this type of loan because it’s unsecured, meaning there is no collateral necessary. Instead, a lender uses information about you such as your credit, income and other debts to decide whether you qualify for a loan and what annual percentage rate to offer you.

Pool loan amounts can be $1,000 to $100,000, and they’re usually repaid over two to seven years. You can expect a rate from 6% to 36% on this loan, but the lowest rates often go to borrowers with good or excellent credit (scores of 690 or higher).

How much do pools cost?

The cost of a pool can vary significantly depending on what materials you use, whether it’s in- or above-ground, and additional features.

An in-ground pool can cost $20,000 to $65,000, according to HomeAdvisor, a website that connects homeowners with contractors. An above-ground pool can cost $3,500 to $15,000.

Pool loan rates

Pool loan example

A $60,000 pool loan repaid over five years at a 12% APR would require monthly payments of $1,335. You’d pay $20,080 in total interest on that loan.

» MORE: Calculate your monthly pool loan payments

Where to get a pool loan

Banks, credit unions and online lenders offer pool loans, but each lender has its own borrower criteria and loan features.

Banks: Existing bank customers can sometimes qualify for lower rates, larger loans or special discounts. In general, banks prefer borrowers with good credit and strong income.

Credit unions: Borrowers with fair or bad credit (689 or lower scores) may be more likely to qualify for a credit union loan. These not-for-profit organizations may look beyond a low credit score and review your membership history to qualify you.

Online lenders: Online lenders vary in their qualification requirements and loan features. Some bad-credit lenders tailor their loans to borrowers with low scores or thin credit histories, for example. Others offer special features to well-qualified borrowers.

» MORE: Home improvement loans for bad credit

How to get a pool loan

The process to get a personal loan generally involves four steps:

1. Get a pool estimate. Work with a contractor to agree on a cost estimate for the project before you start loan shopping. Once you know how much you need, you can choose a lender that offers that amount. Unlike with credit cards and credit lines, you can’t borrow more once you get the loan.

2. Pre-qualify. Online lenders and some banks and credit unions allow you to pre-qualify for a personal loan and see potential loan offers, including rates and monthly payments, without affecting your credit score.

3. Compare lenders. If you get similar pool loan offers, compare not only rates and terms, but also other loan features. Some lenders can fund a loan within a day or two, while others offer extended repayment terms for larger home improvement projects.

4. Gather documents and apply. Collect documents most lenders require on an application — like W-2s, bank statements and a government-issued ID — to move the process along faster. Most lenders can make an approval decision within a day or two and fund a loan within a week.

How to compare pool loans

Borrower requirements: Compare lenders’ minimum credit score, income and debt-to-income ratio requirements to find one you may qualify with. Some lenders include borrowing requirements in the FAQ or blog section of their websites.

Loan amount: Depending on the type of pool you choose, you may need to find a lender that offers large personal loans. Many lenders cap loan amounts at $50,000, but some offer loans up to $100,000. Borrowers typically need strong credit and incomes to qualify for the largest pool loans.

Affordability: Use the APR to compare the cost of multiple loan offers and other financing options. The option with the lowest APR is the least expensive and usually the best offer. Also, check the monthly payments against your budget to be sure you can afford them.

Repayment term options: The repayment term helps determine the size of the monthly payment. Pool loans with longer terms have lower monthly payments, but they cost more in total interest. Some lenders only offer three- or five-year repayment terms, but others are more flexible.

Joint loan option: If you share the home where you’re putting the pool in, you may be able to get a joint loan. Adding a co-borrower can improve your chances of qualifying, getting a larger loan or receiving a lower rate. A co-borrower is equally responsible for payments and has equal access to the funds.

» MORE: Personal loans with a co-signer

Pool loan pros and cons

Pros

• No collateral. Unsecured pool loans don’t require collateral, meaning the lender can’t take your possessions if you fail to repay. Instead, your credit score will drop.

• Fast funding. Some lenders send loan funds the same or next day once you’re approved. Others can fund a loan within a couple of business days.

• Wide range of repayment terms. Repayment terms on pool loans are usually between two and seven years. Some lenders, like LightStream and Navy Federal, offer longer repayment terms for home improvement projects.

Cons

• Rates can be high. Compared with home equity loans and lines of credit, which often have single-digit APRs, personal loans can have high rates.

• Large monthly payments. Because you usually have less than 10 years to repay a personal loan, the monthly payments are often higher than a longer-term financing option, like a home equity line of credit.

• No tax benefits. If you finance a home improvement project with equity, you can usually deduct the interest from your taxes. There are no tax deductions with a personal loan.

Other types of pool loans

Financing a pool can be a years-long commitment. Compare personal loans with other financing options to find the one that fits best with your plans.

Home equity loans

A home equity loan is a second mortgage that’s structured similarly to a personal loan. APRs and monthly payments are fixed. If you’re comfortable using your home as collateral for the loan, home equity loans can be a low-rate financing option.

Here’s what you can expect if you use a home equity loan to pay for a pool:

• Maximum loan amount: 85% of your home’s value, minus what you owe on the mortgage.

• Repayment term: Up to 15 years.

• APRs: Start around 8%.

» MORE: Compare home equity loans

Home equity lines of credit

A HELOC is an open credit line that you can draw on as you need to, making it ideal for projects that last a long time or have surprise costs. HELOCs have variable interest rates, so your monthly payments could fluctuate. Like home equity loans, starting rates are often in the single digits, so it may be a low-cost way to add a pool.

Here’s what you can expect if you use a HELOC to pay for a pool:

• Maximum loan amount: 85% of your home’s value, minus what you owe on the mortgage.

• Repayment term: A 10-year draw period followed by a 20-year repayment period is common.

• APRs: Start around 8%.

» MORE: Compare HELOCs

Cash-out refinance

A cash-out refinance replaces your current mortgage with a new, larger loan. You “cash out” the difference between your new loan and the amount owed, and use it to pay for the pool. Because it’s a brand-new mortgage, you’ll have to have your home appraised and pay closing costs, and the loan will have new terms. This is worth considering only if current rates are lower than what you’re paying.

Here’s what you can expect if you use a cash-out refinance to pay for a pool:

• Loan amount: 80% to 90% of your home’s value, minus what you owe on the mortgage.

• Repayment term: 15 years and 30 years are common mortgage repayment terms.

• APRs: Start around 7%.

» MORE: Compare cash-out refinance lenders

In-house financing

Your contractor may offer you an in-house financing option, usually through a third-party lender. Because this offer is specific to a new pool, loan amounts may be larger than a personal loan and repayment terms may be longer.

Compare this offer with other financing options to be sure you’re getting a good deal.

Loan amounts, repayment terms and rates can vary by company, but here’s what to expect if you finance through a contractor: