How to Pay for a Pool You Can Afford

how to pay for a pool

Having a pool in your backyard has some major summertime perks. Just steps from your home, you can enjoy a cool dip or a place to lounge to help beat the heat. Or you could provide hours of entertainment for energetic kids.

If the only thing standing between you and your own pool is money, rest assured you have several choices for how to pay for such a major expense.

Pools cost thousands of dollars, or easily tens of thousands of dollars. The average cost of an in-ground pool is about $37,000 to $67,000, according to HomeAdvisor. The price varies according to the size, type of materials and features you include, like waterfalls.

Paying for a pool is not ideal for everyone, but some budgets do have more room to support the cost than you might expect.

The key is to review all of your financing options for how to fund a pool, then consider your own budget situation.

Each way of funding a backyard pool reviewed below has advantages and disadvantages.

7 Ways to Pay for a Pool

If you’re ready to take the plunge and install a pool, here are seven different ways you can finance it. Consider each of the pros and cons of these strategies for paying for a pool, along with your personal money situation.

(If you’re still not sure if it’s the right time for you to buy a pool, review the section below on how to know if you can afford to buy a pool right now.)

In this article, we’ll detail these different ways to pay for a pool:

  • Home Equity Loans
  • Home Equity Line of Credit
  • Personal Loans
  • Loans from a pool company
  • Savings Account
  • Retirement Account
  • Credit Cards

Home Equity Loans

Home equity loans are a popular way to pay for major expenses, but they’re not for everyone. If you own your own home, and have been paying the mortgage for several years, a home equity loan may be right for you.

The advantages of a home equity loan are that they provide low-cost financing. These loans are often made at lower rates because banks can rely on your house to provide collateral, or financial backing in the event you can’t pay your loan.

Essentially, with your property offering some security, the bank considers you a lower risk borrower, so you get a better loan deal than you would with other pool financing options.

The amount of loan you can get to pay for your pool depends on the amount of equity you have in your home. Usually, banks will be willing to lend a certain percentage of the equity. Typically, they might lend about 70% you 80% of what you have in equity.

With a home equity loan, you get the money in a lump sum to pay for, say, the cost of a pool immediately. Then you repay the loan with monthly payments of a fixed amount. The danger with these loans is that if you don’t repay them, then the bank has a right to foreclose on your home to recoup its money.

So, taking out a home equity loan to pay for a pool should include careful consideration of your budget and a plan for successful repayment.

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Home Equity Line of Credit

A Home Equity Line of Credit (HELOC) is similar to a home equity loan. The main difference is that, with a HELOC, you are extended a line of credit instead of a full loan.

So, you have the option to only taking out what you need, or up to however much you qualify for. A HELOC uses your home’s equity, or the amount that you have paid toward the principal, as a basis for how much of a line of credit you qualify for.

Like a home equity loan, a HELOC’s main advantage is that they tend to offer lower interest rates, in the ballpark of under 6%. So, for established homeowners, this may be an ideal way to fund the cost of a pool.

How to Afford a Pool

Personal Loans

Personal loans are another common way to pay for a pool if you don’t have all the cash on hand to pay for a pool right now.

With personal loans, the interest rate you pay will depend mainly on your credit score and income, which shows banks whether you are likely to repay the loan.

This interest rate can range from the single digits, which is comparable to a HELOC, to in the low 20s, on par with a credit card.

Your credit score is determined by several factors. Your on-time payment history, your debt load and the length of your credit history are among the top factors determining your credit score.

When you use a personal loan to pay for a pool, it pays to shop around. Look into the personal loan options at your bank. Then compare the rates and terms you may get with other banks. Of course, the lower the interest rate, the less you will pay in additional costs.

However, factor in the amount you may receive as well as the time line for repaying the loan as well.

Loans from a Pool Company

To attract buyers, more pool companies are actually offering their own financing options to help you pay for a pool’s cost.

You can often use these loans for other backyard improvements that complement the pool, like outdoor kitchens, landscaping or new outdoor poolside furniture.

With these loans, you should compare the interest rates against the interest rates you could get on a personal loan or a HELOC when you are deciding how to pay for a pool.

Like personal loans, loans specifically for paying for a pool vary with their amounts, terms and interest rates. Interest rates on these loans are usually higher than with home equity loans or HELOCs – generally the interest rates are in the teens.

Repayment terms can vary from about five years to 20 years, which means that your monthly repayment amounts would vary. So, if you are using a loan from a pool company to fund your pool or backyard project, shop around so you have a sense of the market.

Savings Account

Using money from your savings account to pay for a pool has some good sides and some downsides.

On the plus side, when you use cash to pay for a major expense, you can save substantially on the cost compared to other ways to fund a pool like loans. With loans, you will have the added expense of interest.

However, using your savings account money to pay for a pool may not be a good idea if your savings account is limited, or if you have already created a budget for your savings account.

If you are depending on your savings account to act as an emergency fund in the case of unexpected life events like car repairs or hospitalization costs, it’s not considered a good idea to deplete that money for luxury expenses like paying for a pool.

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Retirement Accounts

Most financial advisors would likely recommend against paying for a pool with money from your retirement account, especially a tax-advantaged account like a 401(k) or an IRA.

Money in a retirement account should be planned to help fund your life expenses during your retirement years, not pay for a pool, which is a cost that’s not really considered a necessity. If you withdraw funds from a retirement account early, you will probably have to pay an early withdrawal fee or taxes. So that would add to the total cost of your pool.

That said, if you are determined to pay for a pool with money from a retirement account, there are ways to do it. (One small advantage to this funding method is that you would not have to pay the additional cost of interest as you would on a loan.)

Consult with a financial advisor to help you plan for additional costs, as well as to help you make sure your plans for retirement are not derailed by paying for a pool.

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Credit Cards

Credit cards are also probably not a good way to pay for a pool. Paying for anything on a credit card, much less a major expense like a pool, carries several financial dangers.

People with credit card debt find that this debt can escalate quickly. Usually, the interest rates on credit cards are much higher than interest rates on other forms of loans like personal loans. Interest rates on credit cards are often in the double digits.

Carrying thousands of dollars in credit card debt to pay for a pool can wreak financial havoc on your credit score. The amount of debt you carry in proportion to your available credit is one of the top factors in determining your credit score. So, if you run up your credit cards, your score plummets.

Having a substantial amount of credit card debt creates a snowball-like effect, meaning your debt can grow quickly. If your debt grows to a point where you cannot manage it, your credit score will face many other consequences.

Most financial experts will tell you that having a pool is not worth these financial risks.

Another downside to using a credit card is that it adds a merchant fee of 2% to 5% charged to the pool contractor. However, usually the pool contractor will pass that charge on to you because the extra fee can be substantial, depending on the total cost of your pool.

Some people – although these are rare situations – may find that paying for a pool or a portion of a pool on a credit card can bring significant rewards. If you have a credit card that offers high cash back rates, and you have a budget in which you can pay down the credit card immediately or by the end of a 0% APR term, you may benefit from paying for a pool this way. But, again, tread carefully.

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Can I Afford a Pool?

If you’re not sure if you can afford a pool, you can take a few steps to help you figure out whether a pool can actually fit in your budget.

First, itemize your current expenses, including all of your monthly bills like mortgage or rent payments, utilities and payments toward debt like student loans or credit card debt. Then, subtract your total expenses from your total monthly income.

The extra income you have after subtracting your expenses is your cash flow. You can use it toward paying off other expenses like a new pool. But, first ensure that your long-term financial goals, primarily your retirement plans, are on track.

Each person has a different financial situation and a different level of risk tolerance. Determining if buying a new pool is right for you now will depend on considering all these factors.

way to pay for a pool

Do Swimming Pools Add Value to Your Home?

Installing an inground pool can increase the value of your property by 4% to 6%, according to the National Association of Realtors.

However, keep in mind that pools can deter some buyers. Some people view a pool as more of a hassle than a luxury.

So, the value a pool adds to your house may be offset by the more limited number of potential buyers. Consider the housing market that you’re in, and whether pools tend to be in high demand there, or whether they are viewed as a liability.

The Bottom Line

A new pool can add a lot of value to both your property and bring a lot of enjoyment to your life.

If you’re ready to buy an in-ground or above-ground pool, but you don’t quite have all the money now, you turn to the financing options above.

From using your home equity to taking out a personal loan, you can find ways to pay for a pool.

The key to buying a pool is to ensure that it adds to your life, and that it doesn’t create financial stress or derail your long-term financial plans.

If your monthly budget has room for pool payments, you do have several options for how to fund a new backyard oasis.

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