Two of the most common types of loans for your swimming pool project
If you’re thinking about purchasing an inground swimming pool, then chances are you’re also considering how you would purchase such a project. Although some homeowner buy an inground swimming pool project with their savings, the majority will finance the purchase in one way or another.
When handling financial institutions, generally there are generally 2 kinds of loans to select from– secured and unsecured.
In basic terms, a secured loan is when the bank (lending institution) uses collateral (like your home) as a means of “securing” the loan. To put it simply, if you default on the loan, they can claim rights to your home (portion of its value) so as to get their cash back.
This type of loan is by far one of the most typical in the swimming pool construction business as it enables property owners to borrow against the equity that they offer in their home in order to finance the project. Also, secured loans typically have lower interest rate and the payments can be spread out over a longer period of time opposed to other kinds of loans.
An unsecured loan is not attached to any collateral, which means the lending firm has not directly utilized security over your home. As unsecured loans are more risky for the lending institution, generally speaking borrowing rate are higher and payment terms are spread over a shorter period of time.
Also, most lending firms will not lend more than $30,0000 on an unsecured loan, although you’ll sometimes find some that will lend in the $40,000 range. If you’re considering a swimming pool and not sure if you’ll approve for a loan, we suggest two actions:
Figure out the current equity in your home so regarding know if you ‘d be offered for a home equity line (secured loan). If so, contact a lending firm so regarding know their rates, programs, etc
Research lending firms that offer unsecured loans and see if that amount will cover your swimming pool project. Also get to know their rates, payment plans, etc
Increasing the value of your Home One point to always consider is that a swimming pool will add value to your property. The majority of lending firms will consider the value of the swimming pool.