Hot Tub Financing: Compare Your Options

Hot tubs can be relaxing, but that relaxation can come with a high price tag. According to Consumer Affairs, a new hot tub can cost between $2,000 and $32,000, with mid-tier spas ranging from $4,000 to $8,000. And that doesn’t include the costs of ground preparation, electrical wiring, or installation. 

Loans or credit lines can help cover the costs of hot tub purchase and installation. You may not find a specific “hot tub loan,” but you likely have several options for financing. 

To help narrow down your choices, we’ve researched different financing types and explained the best options.

Hot tub financing options

Several financing options are available to make this luxury purchase more attainable. It’s important to compare these options carefully to choose the one that best suits your financial situation and minimizes your costs over time.

Option	Best for
Personal loans	Unsecured, flexible funding
Home equity loan	When you know the total cost of your project upfront
HELOC	When you are uncertain of project cost
Dealer financing	Excellent credit borrowers looking for convenience

The right financing option for you depends on your credit score, available equity in your home, and your budget for monthly payments. Here’s a closer look at each option.

Personal loans

Personal loans are a flexible, fast funding option for your new hot tub. These loans are often unsecured, and borrowers can use them for a range of purposes, including home improvements.

With a personal loan, you also have the freedom to make additional purchases or cover the installation costs of your hot tub. 

Personal loans are flexible and can be disbursed quickly, but they may have higher interest rates than certain other types of financing. If this is the case, you’ll pay more in interest over the life of your loan. 

Best for good credit: SoFi^®

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LendEDU rating: 5 out of 5

• Prequalify for a loan, and check your rate without hurting your credit.
• Loans of up to $100,000 are available.
• Use loan funds for home improvement projects, including purchasing and installing a new hot tub.

SoFi offers personal loans from $5,000 to $100,000, with fixed rate APRs between 8.99% and 29.99% APR with all discounts applied¹. Given the range of loan amounts and low rates available to borrowers with solid credit, this lender could be a fit for your hot tub project. But you’ll likely need good or excellent credit to qualify for its loans.

Not only can you finance the cost of your new spa with a SoFi personal loan, but you may use loan proceeds to pay for leveling out the ground, wiring your hot tub, and more. 

Repayment terms can be as long as 84 months, giving you plenty of time to pay off your loan.  

Best for fair credit: Upgrade 

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Editorial rating: 4.9 out of 5

• Personal loans of up to $50,000 for home improvement projects and more.
• Check your rate without affecting your credit.

Whether you’re interested in financing a large or small hot tub project, a personal loan from Upgrade can help. This lending platform offers personal loans from $1,000 to $50,000, with rates as low as 8.49%. It reserves its lowest rates for borrowers with excellent credit.

Unlike many competitors, Upgrade may be willing to work with you if you have fair credit. Lenders often require that borrowers have good credit, but Upgrade’s minimum credit score is just 560. It could be a suitable choice if you have fair credit and want to use a personal loan to finance your hot tub purchase and installation.  

Best for thin credit: Upstart

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Editorial rating: 4.8 out of 5

• Minimum credit score requirement of just 300. 
• Use personal loans of $1,000 to $50,000 to finance a hot tub.
• Use loan proceeds for other home improvement projects too. 

If you have little or no credit, you may worry you won’t qualify for hot tub financing. But Upstart works with borrowers with the lowest possible credit score—300—so it could be an option if you’re seeking a loan for an upcoming outdoor project. 

Upstart uses artificial intelligence technology, not just borrower credit scores, in its lending decisions. Its model looks at factors including income, credit, and more to help determine the likelihood a prospective borrower will repay their loan. Its unique loan decision process makes it accessible to many borrowers. 

Upstart’s unique process makes it an option for borrowers with limited or poor credit, but it only offers two repayment terms: 36 and 60 months. Its origination fees of up to 10% are also higher than some competitors charge. 

Leverage home equity

Apart from personal loans, leveraging your home equity may be an option to finance your hot tub. You’ll often need at least 15% equity to qualify for a home equity loan or line of credit (HELOC). 

Both financing options are secured by your home and can carry low interest rates. Overall, they can be a good choice if you have the available equity and are confident in your ability to repay the loan or line of credit. 

	Home equity loan	HELOC
Type of financing	Lump sum	Credit line
Secured by your home?	Yes	Yes
Interest rate	Often fixed	Often variable
Best for	Borrowers certain of total project cost	Borrowers uncertain of total project cost

Home equity loan

Home equity loans are traditional loans that use your home as collateral, so they often have lower rates than unsecured personal loans. 

But as with a personal loan, you can often expect a fixed rate and predictable monthly payments with a home equity loan. 

If you’re considering a home equity loan, our list of the best home equity loans is an excellent place to start your search. 

HELOC

A home equity line of credit gives you access to an approved pool of funds for a specific period, such as five or 10 years. You can draw on the funds as needed, and you’ll only need to make payments, plus interest, on the amount you borrow, similar to a credit card.

A HELOC may be a suitable option if your hot tub installation will take place over several months or you’re worried about additional installation costs. For instance, if you’re also installing a deck or concrete pad, a HELOC will give you time—and perhaps the financial bandwidth—to do so. 

If you’re interested in taking out a HELOC, you can review our list of the best HELOCs to get started.

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Home equity loan or line of credit uses

Dealer financing

Many hot tub dealers offer financing packages, such as deferred interest credit cards or loans, which allow qualifying customers to fund the purchase of the hot tub as well as any dealer-provided accessories. 

Dealer financing can be an easy and convenient way to pay for your hot tub, but comparing financing options from other lenders is essential to ensure you’re getting a favorable rate and term.

Many hot tub dealers offer the best rates for those with excellent credit. Borrowers with lower credit scores may get higher-rate financing from hot tub dealers. And this option typically doesn’t cover other costs, such as leveling the ground or wiring for your new hot tub, so you might consider other forms of more favorable and flexible financing. 

How much more expensive is financing a hot tub than paying cash?

If you take a loan or credit line for your hot tub, you’ll likely pay interest costs no matter which financing option you choose. The interest you’ll pay varies based on the type of financing, the lender, and your creditworthiness. 

Here’s a breakdown of how much financing could cost you if you borrowed a five-year, $7,500 personal loan with a 10.5% APR:

Payment	Amount
Monthly principal and interest	$160
Total interest	$2,172
Total payments	$9,672

Paying cash instead of financing your hot tub could save you on interest charges in the long run, but it may also deplete your savings. Plus, you won’t be able to invest that cash elsewhere, such as in an investment account, for a potentially higher return. 

Are there financing benefits if I improve my home with a hot tub? 

Financing benefits will be limited if you install a hot tub. Depending on the type of financing and when you were approved, your interest may be tax-deductible. For instance, per the IRS, interest on HELOCs may be tax-deductible if you use the credit line to “substantially improve” your home.

But generally, interest on home improvement loans won’t result in a tax break. That said, adding a hot tub to your yard could be considered a capital improvement, which increases your home’s value. Tracking capital improvement costs could help reduce your capital gains taxes if you sell your home for a profit. 

Which method of hot tub financing is right for you?

Each financing type has unique pros and cons, so it’s important to compare your options, understand how your credit could affect your rate, and shop around with different lenders to find the right solution.

Below is a table that simplifies the decision-making process based on common scenarios:

If you have:	Consider:
High credit score and home equity	A HELOC for lower rates
High credit score but prefer not to use home as collateral	An unsecured personal loan for a potentially quick approval
Lower credit score but home equity	A home equity loan for more favorable rates than personal loans, using your home as collateral
Need for immediate financing without using home as collateral	Dealer financing, though be mindful of higher interest rates
A preference for fixed monthly payments	A personal loan or home equity loan, offering stability in repayment terms