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What is a pool loan?

A pool loan is a personal loan that you can use to finance the cost of installing a pool or spa.

Here’s what you can typically get with a pool loan:

Loan amounts up to $100,000

Fixed loan terms from 1 to 7 years

Fixed or variable interest rates available

Weekly, fortnightly or monthly repayments

Unsecured personal loans are more common but there may be secured personal loan options

Your interest rate will be tailored to you

Pool loan interest rates in Australia start from 5.76% p.a. (comparison rate* 6.55% p.a.), but the interest rate you actually get will be personalised to you.

Lenders consider your credit score, income, other debts and expenses when calculating your rate. It can have a big impact when it comes to calculating your regular loan repayments and the cost of your pool finance overall.

There are also home renovation loans available if your new pool is part of a wider home improvement. This type of finance works similarly to a pool loan, with both secured and unsecured options available.

How to compare pool loans

Aside from the interest rate, there are other factors to consider that will affect how much you’ll need to fork out for pool finance. And with pool builds costing between $10,000 and $100,000, it’s important to get the best loan to keep costs low.

Here are the main factors to keep in mind:

Interest rate

Look for competitive interest rates that you actually qualify for. Personal loan rates typically range from 6 to 30%, but your rate will be based on your specific circumstances.

Fees

Aim to minimise the upfront and ongoing fees that some lenders charge, plus extra repayment fees. If you need help navigating these fees, a personal loan broker can lay out your options to see which offers have no or low fees.

Loan term

A longer loan term will mean lower regular repayments, but you’ll pay more in interest. You’ll pay less in interest with a shorter term but have higher repayments The average personal loan term is just under three years, but with a pool loan where the borrowing amounts tend to be higher, a longer term might make sense.

Flexibility

Look for loan flexibility to make repayments weekly, fortnightly or monthly. Plus the option to make extra repayments and repay the loan early without incurring fees. If you do repay extra, some pool loans offer redraw, which allows you to withdraw your extra repayments if needed.

Fixed vs variable rate pool finance

Depending on the lender, your pool finance can either come with a fixed or variable interest rate. Here’s the difference:

With fixed pool finance, the interest rate and repayments stay the same for the entire loan term. This is handy for planning and budgeting as your costs won’t change.

With a variable rate pool loan, the interest rate and repayments could go up or down with the market.

The downside of fixed rate pool loans is they tend to be less flexible. For instance, you might not be able to make extra repayments and repay the loan early. The trade-off is that fixed loans offer more certainty overall.

Once you’ve worked out the budget for your project, getting pool finance is usually a simple process. Here’s a step-by-step guide on what’s typically involved:

1

Compare pool finance providers

There are dozens of banks, credit unions and specialist lenders that offer pool loans in Australia. Compare deals based on interest rates (remember, the advertised lowest rate may not apply to you), comparison rates (takes into account interest charges and fees but is based on a specific loan amount, which likely won’t be representative of your loan), as well as terms available.

2

Check your credit score

Before you apply, check your credit score to make sure you’re in a good position to get approved. You can do this for free online using Equifax or another credit reporting agency. If your credit score is less than average, you may want to consider a bad credit personal loan.

3

Submit a loan application

Once you’re happy with a particular loan, submit an application to the pool finance provider (this is usually done online and can be done in about 10 minutes with some lenders). Or, use a personal loan broker if you’re stretched for time or need help with your application.

4

Provide supporting documentation

If requested by the lender (or via your broker), provide any supporting documents such as your payslips, bank statements or tax certificates. If your application is complex, like if you’re self-employed, you might need to apply for pool finance through a low doc personal loan as you won’t have the usual documents as a PAYG employee. It just means the lender will likely require additional documentation to verify your income and financial position.

5

The lender will assess your application

Wait for your finance application to be assessed, which generally happens quickly.

6

If approved, sign a loan contract

Once everything is signed and sealed, the loan funds will be transferred to your nominated bank account. If it’s a straightforward application, the whole process can be completed in 1 to 2 business days. For complicated applications, the process will take a bit longer.

Other ways to finance a pool

While a pool loan is a popular choice for many homeowners, there is another way to finance it. You can use the equity in your home to refinance, otherwise known as a ‘mortgage top-up’. This is where you top-up your home loan balance and tap into your equity to fund your pool.

There can be advantages to doing this, but the cost is generally spread over a much longer loan term. This means you’ll likely be charged more in interest, particularly if your home loan term is 20+ years.

Here’s a quick comparison outlining the main differences between a pool loan and refinancing your mortgage.

	Amount available
Pool loan	Up to $100,000
Home loan refinance	Depends on home loan balance and your property’s value
	Interest rates
Pool loan	Starting from 5-6%
Home loan refinance	Starting from 4-5%
	Loan term
Pool loan	Up to 7 years
Home loan refinance	Up to 30 years
	Property valuation required
Pool loan	No
Home loan refinance	Yes
	Security required
Pool loan	Optional
Home loan refinance	Yes

	Pool loan	Home loan refinance
Amount available	Up to $100,000	Depends on home loan balance and your property’s value
Interest rates	Starting from 5-6%	Starting from 4-5%
Loan term	Up to 7 years	Up to 30 years
Property valuation required	No	Yes
Security required	Optional	Yes

Building a pool costs between $10,000 and $100,000, but the exact amount will depend on the type of pool (i.e. is it a plunge pool, full-size lap pool or spa?), plus its location, among other factors.

Here are some basic (and not-so-basic) considerations:

Materials: The most common pool materials are concrete, vinyl-liner and fibreglass. Vinyl-liner pools (the ones above ground with frames) start from around $10,000, while a common fibreglass pool can begin at $25,000. Concrete pools usually start from $25,000, but have a much higher scope for expansion and additional features, like infinity, waterfall, etc.

Construction: If you’re opting for an in-ground pool, you’ll need to think about your property and where you’re building it. This means ease of access to install the pool, ground conditions, any angles or slopes and how they impact the size or shape of your pool.

Ongoing costs: Think maintenance costs associated with water filters, servicing and replacements, pool sanitisation, chemicals, pool covers or cleaners and heat pumps. Adding a pool will also increase your household energy costs due to the pump constantly being in operation.

Most lenders will let you borrow up to $100,000 for a pool loan, but they’ll assess your actual borrowing capacity based on your income, credit history, expenses and debts. If you’re viewed as a greater risk based on these factors, you may not be able to borrow as much, or you’ll be charged a higher interest rate and/or fees.

Can you get pool finance if you have bad credit?

Yes, there are specialist lenders in Australia who offer personal loans to bad credit borrowers for a range of purposes, including financing a pool. If you have an issue in your credit history, expect to be charged a higher interest rate (often above 15%).

That’s why it’s a good idea to do a free credit check to see where you stand before applying.

Something to keep in mind is the cost difference between pool loan offers with different interest rates. For example, a $50,000 pool loan with an interest rate of 7.5% p.a. and 5-year term, will cost you roughly $10,114 in total interest. Whereas an interest rate of 15.99% p.a. will cost you $22,938 in total interest – that’s an eye-watering $12,824 more (ouch).

Will a secured personal loan make the pool finance cheaper?

In most cases, a secured personal loan will be cheaper as the finance will be backed by an asset (i.e. your home or vehicle). However, it’s more common for pool finance to be unsecured, meaning there is no asset attached to the loan.

You can use the comparison table at the top of this page to filter pool loans as secured or unsecured.