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Want to make a splash? How to plan financially for a swimming pool

Want to add a pool to your home for this summer? With the starting cost of a pool equal to a new car -- about $32,000 -- there is a good chance you do not have the funds sitting in your checking account.

Want to make a splash? How to plan financially for a swimming pool

1. Use Money in Your Savings Account

If you have built up a sizeable rainy day or for the future fund, now may be the time to use it. Before you do, you need to revisit why you have that money in there in the first place.

You should keep an emergency fund of at least three to six months of expenses to cover possible job loss, surprise medical bills, or major home or auto repairs. If your savings have surpassed that mark, you can safely put the extra towards your pool.

If you do need to keep that cash where it is, you may be able to use it to help you get a savings-secured loan. These loans lock your savings into a CD as collateral against a loan or credit card. In exchange, your borrowing rate is generally lower than an unsecured loan.

2. Put It on a Credit Card

You can choose to put all or part of your pool construction on a credit card. Of course, you will need to watch the interest rates. If you finance the entire amount, you will have a car loan size payment with an interest rate that is three to ten times higher.

The ideal situation is if you can take advantage of a low or 0 percent interest rate offer. Even then, you will still want a plan to pay the debt before the interest charges kick in. For example, you might want to get your pool in before summer and are expecting a guaranteed bonus in July.

3. Take Out an Unsecured Loan

Unlike a car purchase, there are no dedicated loans for swimming pools. One option is to take out an unsecured loan or personal line of credit.

These loans often have stricter credit requirements because there is no collateral for the lender to repossess, so the lender has more risk. They also usually have interest rates close to or equal to credit card interest rates.

However, if you have excellent credit and little or no other debt, your credit union may be able to help you find an affordable rate.

4. Use a Land Construction Improvement Loan or Home Equity Line of Credit

These loans are commonly used for major home improvement projects, including swimming pool installations. They are available as long as you have built up equity in your home, even if you have not fully repaid your first mortgage.

The downside is that, like a mortgage, you could face foreclosure if you struggle to repay the loan because your home secures the loan. In exchange, this will usually be your lowest interest rate option. The credit requirements also are not nearly as strict as a first mortgage because the total amount you are borrowing is much lower.

Find Out Where You Stand

To find out how much cash you have available, your open credit lines, whether you have loan preapprovals, or to learn more about your options, visit our TDECU digital banking 24/7.


Equal Housing Lender