Taking up a pool loan can help you do more than just finance your pool. It opens up new opportunities and allows you to add features and amenities you won’t be able to squeeze in when working with a limited budget. That said, it’s not unusual for families and pool owners to look for pool loan companies when building a new pool or when remodeling an old one. But how does one find the best pool loan company amidst the sea of lenders and financial institutions?
Today, we’ll look into everything there is to know about swimming pool loans so you can find the best option when financing your pool. For those scouting for a pool loan company, this one’s for you. Let’s start by talking about what a pool loan is.
What is a pool loan?
A pool loan is a kind of personal loan, typically used for home improvement projects, like swimming pool construction or repair. That said, you can use your swimming pool loan for improvements like pool resurfacing, pool replastering, and pool equipment upgrades. It can also be used to add spas and other features that will increase the value of your home.
Give your browser a quick search and you’ll find that there are a lot of companies that offer pool loans. On that note, knowing how each of them works will help you make a better decision before signing the paper. Here are some of the most common types of pool loans.
- Secured Loans.
A secured loan is a type of loan where the borrower pledges assets as collateral for the loaned amount. The loaned amount is secured by the collateral which will be forfeited should the borrower fail to make payment. The lender typically sells the collected assets to make up for the amount of the defaulted payment.
Secured loans are usually offered by banks and other large financial institutions. You’ll often have to apply for this kind of loan and will have to submit a slew of requirements that are often subject to the bank’s approval. A secured pool loan will usually have longer terms ranging anywhere from 10 to 15 years which gives you more than enough time to pay for the loaned amount. They will also have low interest rates because the borrowed amount is secured by the collateral.
- Unsecured Loans.
Quite the opposite of secured loans, an unsecured pool loan requires no collateral so you won’t risk forfeiture of your properties. It’s issued and supported only by your creditworthiness instead of a collateral of similar amount. That said, a good credit score will help when applying for an unsecured pool loan.
Because there’s no collateral involved, unsecured pool loans typically have high interest rates with shorter payment terms. The lender, credit union, or the bank you borrowed money from would prefer to get their money back as soon as possible as lending money without a collateral can be considered a risk for many lenders. We’re talking anywhere from 12 months to 7 years. It can work for you or against you as you may feel like you’re pressed for time making payments for your loan. On the other hand, a short-term payment can give you a clear timeframe when your pool loan will be finished.
- In-House Pool Loan.
An in-house pool loan is a type of loan offered by pool companies, pool contractors, and pool professionals. They work hand in hand with lenders, financial institutions, credit unions, and even banks to provide loans for swimming pool services. It’s no surprise that an in-house pool loan sounds appealing to most pool owners because the application process with in-house pool loans is faster compared to the two aforementioned types of pool loan. That’s because your contractor will most likely have the majority of the documents needed to apply for a loan. Plus, there’s also the fact that they can back you up when it comes to your credibility to make payment. You’ll have a better chance of approval and are most likely to get the funding you need to finish your pool project. Less things to worry about, less things to prepare.
If possible, make sure to check out all the aforementioned options by starting with local companies and credit unions. From here you can ask banks and even your local pool contractor. Make a list of all the companies you’ve talked to and write down their offers.
It’s also imperative that you get their offers in writing. Ask for a print out of the details of the offer you’ve received from the representatives you’re interacted with and remember to ask for a list of the necessary requirements.
What requirements do I need to prepare?
It’s best to be prepared when applying for a pool loan. Whether you’re applying for a secure pool loan, an unsecured pool loan, or if your pool contractor offers in-house financing, having these documents and information on-hand might help. Here are a few.
- Driver’s license number
- Social security number
- Listed financial assets
- Listed collateral assets
- Listed sources of income
- Registered businesses
- Total monthly housing costs
These are just some of the common details and pieces of information companies and lenders would want to look at to gauge your creditworthiness and whether you’re going to be a high-risk borrower. Now, some companies might ask for more while others could ask for less, it all depends on what type of pool loan you’re getting and where you’re getting it from. In some cases, making sure that you’re prepared and that you’ve thought each record and document over can help increase your chances of getting a successful pool loan.
Go over your list and decide which amongst them will work or you. Here are some key points to focus on.
- Payment terms
- Interest rate
- Collateral requirement (if applicable)
With a better understanding of pool loans and with all the information you’ve gathered, you’re equipped to make an informed decision to find the best pool loan company.
