Getting a loan- like I'm 5

[crashgizmo]

So this isn't a "Can you afford it" thread, since that decision has already been made. 

DH and I are thinking of putting in a plunge pool. I've posted before about our outdoor space and I think we would get tons of use out of it. It will be small 10x15 or less. We originally were going to save up the cash to pay for it, but I think we want to do it sooner rather than later. Plus, I've been socking all my cash in the market these days. 

We are getting some quotes this week and will move forward based on those. So, my question is, where do we get a loan? What kind of loan? Our only debt is our mortgage and we have excellent credit. I don't think a home equity loan would work since we just bought our house, but I have no idea how to go about getting a loan for anything other than a house or car. 

Any advice is welcome! 

[qwerty]

Does the pool company offer loans? That would be my first thought, that maybe they have x number of months interest free.

[compassrose]

Do you belong to a credit union? It sounds about the same price as a car loan.

[Mushe]

We're looking at getting a pool and talked to a mortgage guy. He said to check HELOC rates at a credit union, because they should be better than financing through the pool company, although a chain/bigger company would offer that.

[cjeanette]

Check with the pool company

talk to your bank about a personal loan

talk to your bank about a HELOC as I don't know if the rates are lower on that then a personal loan

[livinitup]

You get a loan from any place/person that has lots of money, enough $$ to loan it to you - banks, credit unions, finance companies, wealthy people. You pick the one that costs YOU the least amount of money to get it - in fees and interest charges. Credit unions are really good at low fees/interest to members and you can become a "member" for about $25 when you open a checking/savings account. Banks also lend money, again at different interest rates. The better your credit score, the better your interest rate. Sometimes, if you do a lot of banking, they will give you a better rate as a good customer (like if you have a business and have a corporate account, or save money in a MM or savings account. Just apply (in person or online). A home equity line of credit is good after you have equity in your house - because it allows you to make upgrades to your house and increase the overall value of your house/investment. Those can get set-up through your mortgage company. You can get a loan from a personal friend/family member - this is generally discouraged due to the "strings" that get attached, but its an option and legally binding if you sign the proper paperwork. Its tempting if they can make money (the interest you pay them on the loan) and you get a low interest rate. Finance companies often work with big-ticket items like cars and appliances (Sears makes more in interest payments than sales), they are generally easy to get but have a bad reputation for hidden fees and high interest charges, but there are some good incentives for folks with good credit - just know that they hope/want you to make mistakes so they can reap-in the $$. A credit card is an unsecured loan - also easy to get but with high interest charges and generally discouraged from using for a big-ticket item.

So, look into loans at a bank or credit union and see what it would cost you to get the loan - really add it up and look at the "cost" at the end of the loan period. Look and see if it's worth it to you to borrow the money to get the pool, now, rather than after you save for it. Also, consider your options for an early pay-off - make sure you get a loan with no early pay-off penalties. You sound like you aren't quite than strapped for cash, just strapped for a big purchase. You can set-up a loan, and down the road, pay it off in full. That usually dramatically cuts your interest payments - aka your "cost". This way, you don't drop a large sum of money on this purchase, but you can wipe-out the debt down the road without much overall cost - if it makes sense for you.

[lys]

How much equity do you have in your home? That will be the determining factor if you would need to meet the minimum amount of equity to qualify for a HEL or HELOC.

HEL operates like a regular loan with specified amount paid every month for a specified number of months.

HELOC operates like a credit card with monthly minimum payments based on the current balance each month and an allowable limit to borrow.

I would stay with a HEL if you qualify.

[iheartbanjos]

How long would it take for you to pay it off? What about a 0% promotion on a credit card?