Improving your home is one of those investments that are definitely worth it. When looking at the topic of home improvement, pools are essential, especially if you have a big yard. They offer a long time of enjoying the hot summer days, or if you plan to sell your property someday, it increases the price of your home.
Anyhow, pool installations are not cheap, depending on if you want an above-the-ground one which can cost around 2000$, or an inground pool that has a much bigger price of around 50 000$. You can choose from a variety of loans, so it’s important to know exactly which one is best for your needs Some of the popular ones are home equity and personal loans.
It is essential to understand exactly how loans work before applying for one. That’s why we made this list to make it easier for you to understand them, see the differences and make the right choice.
How do they work?
When you borrow a certain amount of cash, it is mandatory to pay that back and then the interest rate too. Sometimes some other fees may be included in the total sum you’ll have to pay. At least you get to make your payments on a monthly basis. Once everything is paid off, the account is closed.
Types of loans
The most popular option nowadays is the secured personal loans which are backed up either by a savings account, sometimes with a mortgage, and even valuable items. If you are unable to pay back what you owe, they use the savings account to pay it back or take your property. A good option if you are looking into adding or renovating the swimming pool in your home.
If this seems too risky for you, you can always go for personal loans that aren’t secured. These ones rely entirely on your credit score. In other words, it can be pretty difficult to qualify, unless you have a credit score over 700. Additionally, the interest rate could be higher.
If you want to pay the lowest possible interest rate and get the money you need for your swimming pool, you should consider getting yourself a home equity loan. But, remember that your property is going to be the collateral.
In some countries, like Australia, lenders even offer loans dedicated to building or renovating swimming pools. The terms for this option can range anywhere between one year to seven years or more as seen on compasspoolsmelbourne.com.au.
Expect the extra costs
It is essential to acknowledge the interest cost that you will be paying throughout the years. It might seem like it isn’t much at first, but we recommend investing a bit more time into this to ensure you will be able to afford those expenses.
To get this information, once you send your application to the lenders, you should be getting exact information on the percentage rate. Usually referred to as just APR.
So, keep in mind, even though the monthly rate looks great when going with a longer term, you will be paying a lot more money in interest rates throughout the years.
We can’t forget about fees either. These extra expenses can range anywhere from nothing to a few hundred dollars or more. So, make sure you have picked the right lender before making a decision. You wouldn’t want to be surprised by those huge fees.
Expect administrative costs and small yearly costs. It shouldn’t be anything insignificant.
Although, if you are late with your payments, you may get extra fees. So make sure you are paying for everything on time.
When applying for a loan, you should watch for extra fees or you should ask for them to be weaved. Before signing anything, ensure that you know exactly how much money will go toward these extra expenses. Don’t make this swimming pool more expensive than it should be.
How to qualify for a loan
Like mentioned previously, getting accepted for a loan requires you to go through certain qualifications. No lender will provide you with the cash you need if they are not certain that you will be able to pay it back. As always, these borrowers will focus mostly on your credit score because it tells an accurate and short story on your financial history. A better credit score means higher chances to be accepted and sometimes even lower interest rates.
This is why you will need to have some kind of proof of work. A document to show exactly how much are your monthly earnings. They will look at the balance of your earnings and your monthly payment so they are sure you can return the money. If your credit score is low, or if you plan on borrowing more money then they may ask for collateral or a secured type of loan. This allows him to take away your mortgage from you so he can repay your debts. You might need a friend or a person from your family with good credit points to be a guarantor of this loan.
How to apply for a loan
If you are certain that you want to send an application, you can do it online or you can just go in person if that’s your thing. Most people believe that it is best to start out with your bank because they might provide you with a fair offer. Also, they may give you lower rates and fewer fees that you will have to pay. You should seek a loan that has no or low-interest fees in the first few months or ones that gradually lowering the interest fees.
After they have all your information they need, they will look through it and will determine if you are getting this loan or not. If you end up qualified, if possible, you could have the cash by the end of the day, or at least, the next day. Later on, after getting the loan, you will start with your monthly payments. Make sure you are always on time because it affects your credit score.