Swim Spa Financing: Tips for Budget-Conscious Buyers

Swim spas are what happens when a pool and hot tub come together. They have seating arrangements to help you relax and indulge in the warm water. They also have jets or propulsion systems that allow users to swim and perform general aerobics and light exercise activities. However, a swim spa can average between $15,000 to $25,000, meaning many shoppers want to know their swim spa financing options.

Highlights & Key Takeaways

• The average swim spa costs between $15,000 and $25,000
• Interest rates on swim spas can vary but typically fall between 5% to 10% for those with a good credit score 
• Before applying for swim spa financing, be sure to check the interest rate, proposed monthly payment, and fees associated with the loan, and if a down payment is required
• Swim spas provide versatility, allowing users to relax in hot water or swim to get in their daily dose of exercise
• Failure to make the minimum monthly payment on your swim spa loan can negatively impact your credit score

Swim Spa Financing: What You Need to Know

Though swim spas have been around for a few decades or more, they have increased in popularity. Homeowners appreciate the ability to relax and entertain family and friends but also enjoy the ability to get in a workout due to the spa’s built-in propulsion system. But with an average cost of over $15,000, most homeowners don’t have this kind of money just lying around. Swim spa financing provides a great way to purchase a spa and get it delivered and installed for one low monthly payment.

Can You Finance a Swim Spa?

Just as you can finance a pool or a hot tub, you can finance a swim spa. But before you do so, you should ensure you can take on the additional responsibility. Consider who will be using the swim spa, where you will put it (swim spas are often larger than hot tubs and require more space), the process to keep your swim spa clean and sanitary and that you can take on the monthly payment associated with swim spa financing.

What Types of Swim Spa Financing Are Available?

Though purchasing a swim spa with cash is possible, financing will likely be an easier option. Swim spa financing allows you to finance not only the cost of the spa but delivery and installation as well. And in some cases, you may be able to finance any project costs that you need to take on to prepare the space for the delivery of the spa.

Here are the most common ways that you can finance your swim spa.

• Home equity loan - As most homeowners don’t take their swim spa with them when they move; a swim spa can add value to your home if you choose to sell it. But this assumes your swim tub is adequately maintained and is designed to last. For this reason, many homeowners will take out a home equity loan to pay for their swim spa and the associated costs. A home equity loan allows you to borrow money using the equity in your home as collateral.
• HELOC loan - HELOC stands for a home equity line of credit and is similar to a home equity loan. In this case, your lender will approve you for a revolving line of credit based on the equity in your home. You can use this line of credit as you wish, including for investments such as a swim spa.
• Credit cards - Though a credit card can be expensive to purchase a backyard swim spa and all that comes with it, you might be privy to a special offer now, and then that can incentivize the time and expense. But if you use your credit card to purchase something sizeable like a swim spa, it can quickly push your utilization over 30% and cause a dip in your credit score. 
• Personal loans - These loans are an excellent way to seek swim spa financing. Be sure to shop around for the best rates and loan terms, and ensure the lenders you look at are flexible in how you use your loan funds.

Where Do You Get Swim Spa Financing?

There are many ways to get swim spa financing. You can apply for a personal loan from your local bank or credit union or look for online lenders such as Lightstream, Upstart, SoFi, Best Egg, and more. You can also seek financing directly through the dealer selling your swim spa.

• Interest rate
• Borrowing terms
• Borrowing limit
• Monthly payment
• Fees such as loan origination fees, late payment fees, and early payoff penalty
• Communication options if you need customer support

How Many Years Can You Finance a Swim Spa?

You can usually finance your swim spa for 36 to 60 months. And since these units are designed to last five or more years when they are well maintained, you can enjoy your spa for long after you make that final payment.

However, when deciding how long to finance your swim spa, consider how much interest you will pay over time. Take a look at this loan calculator to determine how the length of your financing time can impact how much you will pay based on typical swim spa interest rates between 5% to 10%.

• If you take out a $15,000 loan for your swim spa for five years at a 7.5% interest rate, your payments will be about $300.57 monthly, and you’ll pay about $3,034.15 in interest.
• If you shorten that loan term to three years at the same rate, your monthly payment will go up to $466.59, but your interest will only be $1,797.36. So shortening your swim spa financing by two years can save you $1,236.79 in interest.

What Credit Score Do You Need for Swim Spa Financing?

For most personal loans, including those used for a swim spa, you will need a credit score of at least 610 to qualify. However, the lower your credit score, the higher the interest rate you will pay. A higher credit score, particularly one over 700, will go you access to better rates and loan terms. If you are thinking of financing your swim spa, consider taking some time to improve your credit score before applying. Even taking one extra year to focus on your credit can save you money in the long run.

What Interest Rates Are Available on Swim Spa Financing?

The interest rate for your swim spa loan will vary based on the current interest rates in the market and your credit score. Though most personal loans for a swim spa range between 5% to 10%, the truth is that they can fall anywhere between  4% and 36%, depending on the lender, your creditworthiness, and other factors. For example, LightStream offers hot tub financing rates as low as 3.49%. But your interest rate could be as high as 19.99% if you have a low credit score.

How Do You Get the Best APR on Swim Spa Financing? 

The most competitive interest rates are offered to consumers with good or excellent credit. Look below at how average interest rates can vary for consumers with excellent credit to those with poor credit.

If your credit score is lower than you want, consider postponing the purchase until you have a better financial situation. In the meantime, be sure to do the following.

• Pay down your credit card debts and ensure balances are less than 30% of the available credit line
• Make your payments on time every month
• Take care of any accounts that have been charged off to a collections agency
• Get credit for your utility payments by signing up for Experian Boost 

Can You Get Swim Spa Financing with Bad Credit?

It is possible to get swim spa financing if you have a bad credit score. However, the lower your credit score, the more likely you’ll have to pay a higher interest rate. You may also be subject to the following:

• Security deposit requirements or a downpayment
• Secured loan collateral
• Need for a joint application or co-signer
• Loans with less favorable terms

If you have a credit score under 700, take some steps to improve your credit first. There are many things you can do to improve your credit quickly, too, such as:

• Apply for a secure credit card and make on-time payments that will reflect better on your credit report
• Become an authorized user on someone else’s credit card
• Keep your credit card utilization under 30%
• Ask for a credit line increase on your credit cards to help improve your utilization (however, know that this will likely result in a hard credit inquiry which can ding your credit score by five points and will sit on your credit report for up to two years)
• Apply for a credit-builder loan
• Pay down your debts using either the snowball or avalanche method
• Sign up for Experian Boost to get credit for all of your payments   
• Review your credit reports for errors and file disputes with the applicable credit bureaus if necessary

Pros and Cons of Swim Spa Financing

Financing your swim spa lets you enjoy something fun in your backyard without drawing from your cash reserves. But just as there is with anything, swimming spa financing has pros and cons.

Pros of Swim Spa Financing

The best swim spa loans can provide various advantages, including:

• Helping you build your credit when you make on-time payments and fulfill your loan obligations
• Allowing you to pay for your swim spa over time instead of trying to fork up all the cash at once
• Good credit can yield you a competitive interest rate
• The best swim spa and hot tub loans offer competitive terms, so you can use your loan to fund not only the purchase of your swim spa but the delivery, installation, and any expenses to prep the area, too
• You won’t likely need any collateral if you have a good or excellent credit score

Cons of Swim Spa Financing

Any time you finance a purchase, open a new credit card account, or apply for a personal loan, you must understand that there can be some disadvantages. Here are potential cons related to swim spa financing. 

• You will have to pay interest on your purchase, and interest rates can be high if you don’t have good credit 
• Some loans have fees for origination and late payments, and they may charge an early payoff penalty
• Failure to make your payments on time can impact your credit score by as much as 35%
• Your new loan balance impacts your utilization, which should be kept at 30% overall
• You may need to offer collateral if you have poor credit
• You may later find yourself challenged to pay the minimum amount due each month

Factors to Consider When Financing a Swim Spa

Swim spas will provide endless enjoyment for you, your family, and your friends. But, they are not inexpensive investments. Not only do you need to prepare for the cost of the hot tub, delivery, and installation itself, but you may also need to pay to prepare the area before the unit is delivered. Swim spas require 220 volts and 60 amps of power, and most homes are not equipped with these connections in the backyard. You’ll need to pay a licensed electrician to wire the area. Further, you may need to hire a contractor to level the land and pour a concrete slab and landscape around the area. Though you can use your swim spa financing plan to help pay for these expenses, the specific loan you get matters.

Here are some additional factors to consider when financing your swim spa.

• Interest rate - Most swim spa financing plans have an interest rate between 5% to 10%. However, your interest rate may be higher if you have a poor credit score. Ensure you understand how your loan’s interest rate will impact your payment and the amount you pay for your loan over time.
• Monthly payment - The amount you borrow, your interest rate, and the length of your loan will affect how much you pay each month. Ensure you have enough money to pay your loan on time every month. If you default on a payment and don’t make it up within 30 days, your credit score can take a hit of up to 180 points.
• Down payment - Depending on your credit score and the creditor you work with, you may be required to make a down payment. However, the more you pay down, the lower your monthly payment will be and the less you will pay in interest throughout your loan.
• Fees - Though many personal loans do not have fees, read the fine print. You may be subject to a loan origination fee, late payment fee, and early payoff penalty.

Consider all these factors when deciding if financing your swim spa is right for you. And compare these factors across the lenders you assess so that you can make an informed decision.

How to Apply for Swim Spa Financing

Applying for swim spa financing is like applying for a personal loan. Here are the steps you can anticipate.

• Shop for various swim spas - Narrow your choices to the one that best meets your needs. Obtain an estimate from the dealer.
• Ask the dealer about prequalification - This will give you potential loan offers with interest rates, monthly payment expectations, etc., and will not result in a hard credit check.
• Compare lenders - Don’t jump in with the first lender you see. Be sure to company loan rates, terms, and features such as fees, rate discounts for autopay, funding time, payment flexibility, and the expected customer experience.
• Have all of your documentation ready before you apply - You’ll likely need two bank statements, your most recent W-2, and copies of your government-issued identification card (driver’s license or passport). Know that it might take a day or two before you receive an approval determination, and funding times vary by lender.

To improve your chances of approval for swim spa financing, take steps in advance to improve your credit score. Good payment behavior, an extended payment history, and responsible borrowing can all go a long way in helping you get the best swim spa loan.

Final Word

Financing your swim spa is a great way to protect your cash reserves and allow you to invest in something fun for you, your family, and your friends. But interest rates on swim spas can vary, ranging from 5% to 10% or higher. To ensure you don’t pay more than necessary, take steps to improve your credit score before applying for swim spa financing. And compare the rates amongst various lenders to ensure you get the best terms possible.