Fraud Blocker
A man and a woman, both looking serious, are reviewing documents together in a kitchen. A laptop is open on the counter in front of them.

Swimming Pool Loans: To Fee or Not to Fee

Share this post:

Home Improvement Loans: What You Need To Know About Fees and Interest Rates

The question of loan fees comes up every day in the home improvement lending business and just about every ad that you find will say “No loan fees” or “free loan”. It’s a great talking point and it seems to make sense that no fees is better than some fees. And it’s true, assuming that the rates and other factors are the same for both loans. The problem is that the other factors that borrowers must consider when comparing loans are rarely, if ever, the same. If faced with a 15 year loan at 6.49% and no fees Vs. the exact same loan with a fee of $500, the decision is easy – go with the free loan. When loan factors vary, borrowers should look for the catch.

The catch comes with the fact that the lender or the broker needs to make money somehow and there are really only two ways: Charge the borrower something for the loan in the form of points (a % of the loan amount) AKA fees, OR increase the rate to collect a rebate from the bank or lender. In most cases, the free loan will have a rate significantly higher than the loan with the fee. That’s because when you finance a swimming pool or other home improvement, the amount that a lender or broker needs to increase the rate to make a profit is more than it is in the mortgage world. If a company wants to earn $500 on a $50k loan (one point or 1%) they may very well have to increase the RATE they charge by as much as 2%. That means the 6.49% loan from the loan originator just became an 8.49% loan to the customer – but at least it’s FREE, right?

Now let’s make the easy comparison. The 6.49% loan that you paid $500 to get has a payment of $435 per month. The 8.49% loan that you got for free has a payment of $492 per month. That means you save $57 per month and $684 per year by paying for the lower rate. You’ve essentially paid $500 to get a 2% rate break. The only way the free loan is in your best interest – no pun intended, is if you pay it off entirely in about 8 months. That’s how long it takes to save back the $500. If you hold that loan for 10 years, the $500 fee saves you $6,840. If you hold it the whole 15 years, you save $10,260. That’s an awful lot of savings for a $500 up-front cost. The bottom line is this: DON’T FALL FOR THE “NO FEES” SALES PITCH. There is a lot more to a loan than the cost. One way or another you’ll pay something for that loan. You either pay through a higher monthly payment or an up-front charge. Some of the most expensive loans you’ll ever see are “Free”. If you want to do your own comparisons try our pool loan calculator and see the monthly payments for yourself.

For more information on swimming pool financing and finding the loan that’s best for you, contact Viking Capital at 904-686-1702 or visit www.poolloan.net.

Disclaimer:
This blog is based on information available at the time of publishing and for the purpose of sharing information with the public related to swimming pools and projects that can be financed through Viking Capital. Although we strive to be complete and accurate, it is not information that is verified or maintained. It should not be relied upon for making financial decisions. An investment such as a swimming pool is significant. Viking Capital recommends consulting with a financial professional regarding your financing decisions and with pool professionals regarding pool options. To learn what financing options are available for you today, please apply with Viking Capital and you’ll receive your free loan consultation. Click Here to Apply.

Download our "Top Pool Trends" eBook

Helpful Info

Manufacturer Vs. Installer Warranties: What You Need To Know
14Feb

Manufacturer Vs. Installer Warranties: What You Need To Know

Key Takeaways When purchasing products or services, understanding the types of warranties available is crucial for ensuring long-term satisfaction and protection. Two primary types of warranties come into play: the manufacturer warranty and the installer warranty. Each serves a distinct purpose and covers different aspects of a product’s lifecycle. The…

How Long Do Fiberglass Pools Last
24Jan

How Long Do Fiberglass Pools Last

Key Takeaways Fiberglass pools have become a popular choice among the various types of pools due to their durability, low maintenance, and aesthetic appeal. However, the longevity of a fiberglass pool is not solely dependent on its material but also on several critical factors, including the quality of materials used,…

How Long Does A Concrete Pool Last
20Jan

How Long Does A Concrete Pool Last

Key Takeaways When it comes to building a pool, homeowners are often faced with a variety of choices, a major one of those decisions to make is the material to use; fiberglass, vinyl or concrete. Each type of pool has its own benefits, but durability is one of the most…

When To Close Pool
15Jan

When To Close Pool

Key Takeaways Closing your pool at the right time is crucial for maintaining its condition and ensuring a smooth reopening when the weather warms up. The decision of when to close your pool largely depends on understanding your local climate, recognizing key signs that indicate it’s time to close, and…

The Importance Of Regular Maintenance In Keeping Your Pool Warranty Valid
20Sep

The Importance Of Regular Maintenance In Keeping Your Pool Warranty Valid

Key Takeaways A pool warranty is a critical aspect of owning a swimming pool, offering protection against defects and failures in your pool’s structure and equipment. Understanding the details of your pool warranty—including what it covers, its duration, and its limitations—is essential for maximizing its benefits and ensuring your investment…

Introduction To Pool Automation Systems
13Sep

Introduction To Pool Automation Systems

Key Takeaways Pool automation represents a significant advancement in pool management, leveraging modern technology to streamline maintenance and enhance user convenience. By integrating sensors, timers, and smart devices, pool automation systems can handle essential tasks such as filtration, chemical balancing, heating, and lighting with minimal manual intervention. This not only…

Let's Get You
Your Dream Pool!

Schedule a free, no obligation call with one of our loan consultants to talk about your specific situation.
It won’t hurt your credit score!

Outdoor patio with a wooden pergola, wicker chairs, a stone bench with a fire feature, and a dining table. A grill is in the background, and a pool is partially visible.
A backyard with a swimming pool, patio furniture under a red canopy, and a two-story house in the background, during dusk.
A rectangular swimming pool beside a stone wall, with a wooden pergola and lounge chairs on one side and a grassy area with palm trees on the other.
Outdoor patio with a barbecue grill, wooden cabinets, and a countertop. A pool and palm trees are visible in the background under a clear sky.

How Much Would You Like To Borrow?