When I moved into my house, my backyard was a mess of weeds and not much else. Because our house was a new build, we didn’t even have grass.
I love to spend time outside, so I knew I needed to prioritize landscaping projects, but I quickly discovered creating an awesome backyard was expensive.
The good news is there are plenty of financing options for outdoor projects, including landscaping loans. The bad news is not all these options are smart choices.
If outdoor projects are your top priority, it’s important to make good choices about how you pay for your new backyard. Here are all your options so you can find the right source of financing.
Landscaping loans and financing for outdoor projects
Options for homeowners financing outdoor projects include paying with savings, landscaping loans, personal loans, and home equity loans. There are pros and cons to each approach.
Use your savings
Paying with savings is often the best way to finance a backyard because you won’t have to pay interest on your upgrades. But there are some downsides.
First, the money you put into upgrading your yard won’t be available for other goals (or emergencies), such as repaying debt or investing for retirement. While investing in backyard upgrades can increase the value of your home, only some outdoor projects have a positive rate of return.
Putting in a fire pit, for example, costs around $4,500, according to the National Association of Realtors’ Remodeling Impact Report, but you’ll recover only about $3,500 when it comes time to sell.
Second, it can take a long time to save up enough for big projects. For example, our goal was to put in a swimming pool. We paid cash for it, but we didn’t get it installed until we’d been in our house for five years.
It’s frustrating to wait when you want to enjoy your dream backyard, but if you can be patient, you can enjoy outdoor amenities without worrying about having bills (or interest) to pay.
Try a landscaping loan
Some landscaping companies offer in-house financing for big projects such as swimming pools. One company in our area will even finance the installation of a pond or waterfall. There are also local and online lenders that offer dedicated home improvement loans.
If you can find a landscaping company offering in-house financing, it streamlines the process since you won’t have to work with a separate lender.
Lenders offering landscaping or swimming pool loans also know what these projects cost and are more likely to loan enough money to pay for the work to be done. A general personal loan lender may have lower loan limits.
The big downside to landscaping loans is the fact that you’ll often pay a lot in interest — with APRs around 5% to 10% for creditworthy borrowers — which makes your project more expensive.
You can use our personal loan calculator to estimate how much your project will cost based on how much you borrow, the interest rate, and the length of your term. You also can check out some of the best lenders for home improvement projects to find financing at competitive rates.
Consider a personal loan
If you’re financing an outdoor project, you don’t have to take a specialized home improvement or landscaping loan.
Personal loans can be used for any purpose, and there are many more lenders offering general personal loans than dedicated landscaping loans. You can shop for personal loans with online lenders, credit unions and community banks, and peer-to-peer lenders such as LendingClub.
The downside of using personal loans to fund a backyard project is that, again, you’re paying interest and the project will be much more expensive because of it.
If you’ve decided to borrow anyway, take the smallest loan possible and compare lenders carefully. Start your search by checking out some of the best personal loan lenders.
Get a home equity loan
If you have equity in your home, you can borrow against your house to pay for your backyard. But taking a home equity loan is risky because your home is in jeopardy if you can’t make payments.
Still, home equity loan rates are lower than most other types of unsecured debt because these loans are secured. There are also some tax deductions available for home equity loans if you itemize.
Despite the risk of potential foreclosure, many homeowners decide a home equity loan is better than a personal loan because of these benefits.
If you’re taking a home equity loan, be aware you may have to pay certain costs associated with getting the loan, such as paying for an appraisal to make sure you have enough equity.
Many lenders won’t lend to you if the combined value of your primary mortgage and home equity loan equals more than 80% of what your house is worth.
Comparing financing options for outdoor projects
As you consider options for financing outdoor projects, some key things to think about include:
- Return on investment: If you won’t get the money back that you put into the project, borrowing is a bad idea unless you have extra cash to spare and plan to stay in your home for a long time.
- Total cost of the project: How much you’ll pay in total. Add up the interest cost if you’re borrowing to make sure the landscaping upgrade is worth the total you’ll have to spend.
- Most affordable financing: Don’t just look at the monthly payment because if a loan has a longer repayment term, the monthly cost may be lower — although total costs are higher. Also, pay attention to whether lenders are offering fixed-rate loans, which stay the same the whole time you have the loan, or variable-rate loans. A variable-rate loan may have a lower starting rate, but interest costs and monthly payments could rise or fall.
- Approval for the necessary loan amount: Lenders have different minimum and maximum amounts they’ll lend. Select a lender that will approve you for the amount you need so you can complete your project but not borrow more than necessary.
It’s also a good idea to consider doing part of the project yourself if it’ll save you money.
While we paid a professional to install our pool, we planted flowers and mulched ourselves, saving thousands by doing this work on our own.
Sweat equity helps make projects cost less, which means you’re more likely to recoup your investment — and you’re likely to enjoy the yard more when you know all the effort you put into it.
Interested in a personal loan?
Here are the top personal loan lenders of 2019!| Lender | APR Range | Loan Amount | |
|---|---|---|---|
1 Includes AutoPay discount. Important Disclosures for SoFi. SoFi Disclosures
2 Includes AutoPay discount. Important Disclosures for Payoff. Payoff Disclosures
3 Important Disclosures for FreedomPlus. FreedomPlus Disclosures
4 Important Disclosures for Citizens Bank. Citizens Bank Disclosures
5 Important Disclosures for LendingPoint. LendingPoint Disclosures
6 Important Disclosures for LendingClub. LendingClub DisclosuresAll loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.95% to 35.89%*. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 94105. †Per reviews collected and authenticated by Bazaarvoice in compliance with the Bazaarvoice Authentication Requirements, supported by anti-fraud technology and human analysis. All reviews can be reviewed at reviews.lendingclub.com **Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between January 1, 2018 to July 20,2018. The time it will take to fund your loan may vary. 7 Important Disclosures for Earnest. Earnest Disclosures
8 Important Disclosures for Avant. Avant Disclosures* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC. ** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33 * Important Disclosures for Upgrade Bank. Upgrade Bank Disclosures* Your loan terms are not guaranteed and are subject to our verification and review process. You may be asked to provide additional documents to enable us to verify your income and your identity. This rate includes an Autopay APR reduction of 0.5%. By enrolling in Autopay your payments will be automatically deducted from you bank account. Selecting Autopay is optional. Annual Percentage Rate is inclusive of a loan origination fee, which is deducted from the loan proceeds. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. All loans made by WebBank, member FDIC. Please refer to Upgrade’s Terms of Use and Borrower Agreement for all terms, conditions and requirements. ** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days. |
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 | 5.74% – 16.99%1 | $5,000 - $100,000 | |
 | 7.54% – 35.99% | $1,000 - $50,000 | |
 | 7.99% – 35.89%* | $1,000 - $50,000 | |
 | 5.99% – 24.99%2 | $5,000 - $35,000 | |
 | 5.99% – 29.99%3 | $7,500 - $40,000 | |
 | 6.79% – 20.89%4 | $5,000 - $50,000 | |
 | 9.99% – 35.99%5 | $2,000 - $25,000 | |
 | 6.95% – 35.89%6 | $1,000 - $40,000 | |
 | 6.99% – 18.24%7 | $5,000 - $75,000 | |
 | 9.95% – 35.99%8 | $2,000 - $35,000 | |