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If you're like a lot of homeowners right about now, you've been self-isolating long enough to have an entire list of things you want to change about your home. One of those things may be to build or replace a deck overlooking what will surely one day be a marvelous garden. Given that it costs roughly $30 to $60 per square foot to add a deck, you may also be exploring your deck financing options. Here, we'll discuss deck financing, how to find the best lender, and things to consider before taking the leap.
Like any home improvement project, you can finance a deck. Before you fill out a loan application, though, keep two things in mind:
No matter what your ideal deck project looks like in your mind's eye, there's a way to pay for it. Here are some of your best options for covering the cost:
The best personal loans are flexible. Once you're approved, most lenders allow you to use a personal loan for anything, from building an experimental airplane in your garage to adding a custom deck to your home.
One of the nice things about this home improvement project -- whether you add a wood deck, composite deck, or a mix of the two -- is that it adds value to your property. Here's how to do it:
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If you're looking for a list of lenders who offer home renovation loans, you're welcome to start with our list of best renovation loans. These lenders are our experts' favorite picks for their low rates and favorable terms.
Get the best rates and terms to fit your needs. Here are a few loans we'd like to highlight, including our award winners.
The majority of personal loans are unsecured loans, meaning you don't have to provide something of value as collateral in order to get the loan. More on this in a moment.
Some deck builders offer financing, often through a partner lender. If your contractor offers you a financing solution, take a look. It's good to have options to compare.
As convenient as it may be to accept the financing offer without rate shopping multiple lenders, it's still a good idea to compare other options. Given today's low interest rates, another lender may be able to beat the interest rate and terms. And if no one else beats the interest rate and repayment term of the contractor's lender, you can always circle back around to them.
As a homeowner, you have the option of using some of the equity in your home to fund home improvement projects, like a new deck. Home equity loans are fairly straightforward.
Let's say your home is worth $275,000 but you only owe $175,000 on the mortgage. That means that you have $100,000 in equity. Borrowing against that equity allows you to snag a loan at a low interest rate. That's because your home acts as collateral -- something that you own that can be used to secure the loan. If you fail to make payments as agreed, the lender has the legal right to take possession of your home, sell it, and recover their loss.
Home equity loans can be a powerful financial tool, but they also put one of your greatest financial assets at risk. Be very sure you can keep up with the monthly payment before opting for a home equity loan.
A HELOC is similar to a home equity loan, with a couple of key differences.
When you take out a traditional home equity loan, all loan proceeds are disbursed right away, and you repay them in equal monthly installments. With a HELOC, once the lender approves you, you're given a credit limit. You can take out as much or as little of that limit as you need. Once a portion is repaid, you can borrow it again, typically up to 10 years from the time the loan is granted.
Most HELOCs give you 20 years to repay the entire outstanding balance. Like a home equity loan, a HELOC is secured by your property.
Another perk of having excellent credit is the ability to qualify for a credit card with a 0% promotional rate. These cards typically give you 12-18 months of interest-free borrowing.
If you can swing the monthly payment, a card with a 0% promotional rate represents a great way to finance a new, beautiful deck. For example, if your deck costs $10,000 and your promotional rate lasts 18 months, 18 equal payments of $556 will pay the project in full. And there will be no interest as long as you pay it off on time. If you choose not to pay it off in time, calculate your interest payments with this handy credit card interest calculator.
Having fair or poor credit doesn't mean you must give up the dream of sipping a glass of wine as you watch the sunset from your pergola-covered deck. It may be a while before we see interest rates this low again, so check lenders that specialize in loans for borrowers with poor credit before counting yourself out.
Even if you must postpone your dream until you boost your credit score, don't give up on it. A new deck gives you something to look forward to as your financial situation continues to improve.
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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
Citi Personal Loan disclaimer:
**Rates as of 05-31-2024. Your APR may be as low as 11.49% or as high as 20.49% for the term of your loan. The lowest rate quoted assumes excellent credit and a loan term of 24 or 36 months. Your APR will depend on a variety of factors including your creditworthiness, term of loan, and existing relationship with Citi. For example, if you borrow $10,000 for 36 months at 15.99% APR, to repay your loan you will have to make 36 monthly payments of approximately $351.52.
There is a 0.5% APR discount if you enroll in automatic payments at loan origination. Additionally, existing Citigold and Citi Priority customers will receive a 0.25% discount to the interest rate. If you are in default, your APR may increase by 2.00%. No down payment is required. Rates subject to change without notice.
You must be at least 18 years of age (21 years of age in Puerto Rico). Co-applicants are not permitted. Loan proceeds cannot be used for post-secondary educational or business purposes.
If you apply online, you must agree to receive the loan note and all other account disclosures provided at loan origination in an electronic format and provide your signature electronically.
Credit cards issued by Citibank, N.A. or its affiliates, as well as Checking Plus and Ready Credit accounts, are not eligible for debt consolidation, and Citibank will not issue payoff checks for these accounts. If you are unsure of the issuer on the account, please visit https://www.citi.com/affiliatesproducts for a list of Citi products and affiliates.
*Upstart Loan Disclaimer
The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 21.97% and 36 monthly payments of $35 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $12,646 including a $626 origination fee. APR is calculated based on 3-year rates offered in the last 1 month. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application.
*SoFi Personal Loan Disclaimer
Fixed rates from 8.99% APR to 29.99% APR reflect the 0.25% autopay interest rate discount and a 0.25% direct deposit interest rate discount. SoFi rate ranges are current as of 02/06/2024 and are subject to change without notice. The average of SoFi Personal Loans funded in 2022 was around $30K. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors.
Loan amounts range from $5,000–$100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0%-7%, which will be deducted from any loan proceeds you receive.
Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi.
Direct Deposit Discount: To be eligible to potentially receive an additional (0.25%) interest rate reduction for setting up direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A. or eligible cash management account offered by SoFi Securities, LLC (“Direct Deposit Account”), you must have an open Direct Deposit Account within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled payroll direct deposits of at least $1,000/month to a Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion. This discount will be lost during periods in which SoFi determines you have turned off direct deposits to your Direct Deposit Account. You are not required to enroll in direct deposits to receive a Loan.
Impact to credit score: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.