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Personal Loans

Shed Loans: Compare Your Financing Options

A house provides shelter, but a home allows you and your family to fully enjoy that house. If you’re an outdoorsy, DIY kind of person, a shed can be an important part of that plan. Sheds give you a home base for your hobbies, whether that’s landscape maintenance, gardening, or even raising chickens.  

There’s just one problem: sheds are expensive, with an average cost of $2,500. If you don’t have the extra cash on hand, you may need to consider shed financing. Here, we’ll review the range of pricing factors and your shed financing options.

In this guide:

Costs to know when financing a shed

Sheds take all shapes and sizes, from simple lean-to closets to store your yard tools to small outbuildings that house livestock or even people. As such, there’s no one-size-fits-all range of costs. It’ll vary a lot more than most home improvement projects

That said, we can provide some costs to consider when choosing how much shed financing you’ll need:

Type of shedTypical cost range
Prefabricated$350 to $4,000
Custom-built by installers$800 to $5,000
Custom-built, DIY$2,000

In addition to the type of shed you choose to build, you’ll have a wide range of design choices that will affect your total costs. 

Material costs, for example, vary—from plastic sheds that are less than $1,000 to metal sheds costing as high as $7,000 and brick costing upward of $24,000. Meanwhile, the foundation of a shed can range from less than $100 for skid foundation to more than $12,000 for a concrete slab.

If you build your shed, you can save money for most features of your shed. If you hire a professional installer, you can expect to pay more toward the higher end. 

Four types of shed loans

Once you have an idea of the amount of financing you may need for your shed, you can evaluate your options. Generally, there are four types of shed loans to consider, each with benefits and drawbacks. Here’s a closer look at each type.

Personal loan

Personal loans can be used for nearly anything, including financing a shed. Since they’re doled out in a single lump sum, they’re a great choice if you’re making a one-time payment to a shed installation contractor or when purchasing materials or a prefab kit all at once. 

Most personal loans are unsecured, so you’ll pay higher rates than a secured loan. On the other hand, you won’t risk having your collateral—assets such as your home, car, or investment account—repossessed if you default on the loan, and these loans are often quicker and easier to get.

As with any loan, you’ll qualify for the best rates with good credit. However, personal loans can be a bit tougher to qualify for if you don’t have good credit unless you use collateral or a cosigner. You may have to pay higher fees and interest rates if you’re approved at all.

A good option for:

  • Borrowers with good credit
  • When you need funds quickly
  • Paying for shed costs all at once

Not a good option for: 

  • Obtaining the lowest rates possible

Best for good credit: Sofi

Personal loan

  • Higher loan amounts with a minimum of $5,000
  • A low-cost option due to few required fees and discounts for autopay
  • Provides extra membership benefits for high customer satisfaction

SoFi is one of the best personal loan lenders due to its low annual percentage rate (APR), lack of fees, high customer satisfaction, and abundant benefits. For example, the lender offers free consultations with personal financial advisors, career counselors, and even offers unemployment protection. 

The downside is that SoFi’s minimum loan size is higher than the cost of the average shed. If you don’t need to borrow at least $5,000, it may not be the right choice. You can, however, combine the loan funds with other uses, such as if you need to consolidate any higher-interest debt too. 

  • APR: 8.99% – 23.43%
  • Loan amounts: $5,000$100,000
  • Credit score: 660 or higher
  • Credit score category: Good to excellent
  • Soft credit pull to check rates: Yes
  • Deposit time: As soon as the same day
  • Origination fee: 0% to 6%
  • Late fee: $0
  • Discounts: 0.25% autopay discount and 0.25% member rate discount
  • Repayment terms: 24 – 84 months

Best for fair credit: Upgrade

Personal loan

  • Easy application process and quick funding
  • Offers more realistic loan amounts for most shed projects
  • An option for fair-credit borrowers, with a soft credit check that won’t impact your score

Upgrade is a suitable lender if your credit isn’t the greatest because it doesn’t have quite as high of a minimum credit score requirement as other lenders. It’s also a good all-around choice for financing a shed because its minimum loan amount aligns with the average shed cost.  

However, because Upgrade also offers personal loans to those with fair credit, it tends to charge higher rates and fees, boosting your loan’s overall cost. You can get an idea of exactly how much more expensive it’ll be by using a personal loan calculator.

  • APR: 8.49%35.97%
  • Loan amounts: $1,000$50,000
  • Credit score: 580 or higher
  • Credit score category: Fair to excellent
  • Soft credit pull to check rates: Yes
  • Deposit time: One business day
  • Origination fee: 1.85% – 9.99%
  • Late fee: Up to $10
  • Discounts: Yes but amount isn’t specified (and already included in the APR calculation)
  • Repayment terms: 24 – 84 months

Home equity loan

Home equity loans also give you money as a single upfront payment but may offer lower interest rates than a personal loan. However, you should compare the costs carefully because home equity loans typically have more fees than personal loans. These fees can total 2% to 5% of the loan amount. 

Home equity loans are based on a percentage of your home’s value, which serves as the loan collateral. Home equity is how much your home is worth minus the remaining value of your mortgage. In other words, it’s how much of your home you “own.”

Home equity = value of your home – remaining value of your mortgage

If you don’t have much equity built up in your home, you may be unable to borrow. Lenders typically require you to have at least 20% or more equity before they consider you for a loan, but some lenders still allow you to borrow if you have less equity. 

Experts generally don’t recommend tapping into your home equity to borrow money unless it’s for something that improves your home. Sheds fall into that category, making them a good use of a home equity loan. 

A good option for:

  • Borrowers looking for the lowest possible interest rates
  • Homeowners with 20% or more equity in their homes

Not a good option for: 

  • Obtaining shed financing funds quickly
  • Borrowers who don’t want to put their homes at risk of foreclosure if they default on the loan

Best for accessing your equity: Spring EQ

Home equity loan

  • Faster-than-average funding time
  • High loan amounts with the potential to borrow up to 90% of loan-to-value
  • Lower minimum credit score requirements make it an option for fair-credit borrowers

If you’re planning an especially fancy shed purchase and want to use your home equity, Spring EQ might be a good lender for you. It has a much steeper minimum loan amount than most other types of storage shed financing options at $25,000. 

In addition, Spring EQ isn’t available in a few states, such as New York and West Virginia, and it doesn’t offer online payment options. 

  • APR: Not disclosed
  • Loan amounts: $25,000$500,000
  • Credit score: 620 or higher
  • Credit score category: Fair to excellent
  • Soft credit pull to check rates: No
  • Deposit time: 21 business days on average
  • Origination fee: Not disclosed
  • Late fee: Not disclosed
  • Discounts: Not disclosed
  • Repayment terms: 5 – 30 years

Home equity line of credit (HELOC)

HELOCs are similar to home equity loans in many ways. They are available to people with more than 20% equity in their homes, offer lower rates but higher fees, and come with the possibility of losing your home if you default. 

However, HELOCs are structured a bit differently. HELOCs have a draw period lasting about 10 years, during which time you can spend and pay off your balance just like a credit card. After that, it enters a repayment period when you’ll pay any remaining balance as if it were a loan. 

Like other lines of credit, HELOCs feature variable rates that can change over time. This can work for or against you. In a low-interest-rate environment, you may be able to get extra-low rates, but payments can quickly become unaffordable if rates rise.

Since you can use the funds as needed, HELOCs are an excellent choice for DIYers buying shed materials over time. That way, you can avoid paying interest on things you don’t need to buy yet.

A good option for:

  • Homeowners with at least 20% equity in their homes
  • Borrowers looking for lower rates than credit cards
  • DIYers building their sheds who need to space out costs over time

Not a good option for: 

  • Borrowers who may not be able to make their payments if interest rates rise
  • Homeowners who are cautious about the possibility of foreclosure if they default on the HELOC

Best overall: Figure

HELOC

  • Funding within days
  • All-online application and appraisal
  • Must draw your full credit line up front, with option to pay down the balance to restore your credit limit

Figure is a top-rated HELOC lender that offers low rates for borrowers with excellent credit and fast funding—you may even get your loan funds faster than some personal loan lenders. Figure partners with various credit unions to fund these HELOCs, which may contribute to the lower rates.

The downside is that Figure is a relatively new lender with a unique funding model based on blockchain technology. It hasn’t withstood the test of time yet and is loosely regulated. 

If that doesn’t scare you away, it could be an excellent way to qualify for a low-rate HELOC, especially if you need funds fast. 

  • APR: 6.54%15.54%
  • Loan amounts: $15,000$400,000
  • Credit score: 640 or higher
  • Credit score category: Fair to excellent
  • Soft credit pull to check rates: Yes
  • Deposit time: As little as five days
  • Origination fee: Up to 4.99%
  • Late fee: None
  • Discounts: 0.25% discount for autopay (already included in APR calculation)
  • Repayment terms: Draw period of 5 years, followed by repayment period of 530 years

Best for fast funding: Hitch

HELOC

  • Quick funding once approved
  • Fast application, appraisal, and approval—all online
  • Available in Colorado, Florida, Maryland, Oregon, Utah, and the District of Columbia

Hitch is an online HELOC lender network that matches you up with another lender to provide funds for your shed project. That means you may be more likely to find the lowest rates versus working with a single lender.

Hitch is an especially good choice if you need funds faster than the average lender. Unlike a traditional HELOC, which requires an appraiser to visit your home and can take up to six weeks to fund, Hitch uses an automated approach so it can get your funds to you within 21 days.

  • APR: 7.75%13.00%
  • Loan amounts: Up to $500,000
  • Credit score: 620 or higher
  • Credit score category: Fair to excellent 
  • Soft credit pull to check rates: Yes 
  • Deposit time: 26 days
  • Origination fee: 2.5% 
  • Late fee: Not disclosed
  • Discounts: 0.25% with some lenders
  • Repayment terms: Draw period of 2 – 10 years, followed by repayment period of 10 – 30 years 

Manufacturer line of credit

Many manufacturers and home improvement stores offer lines of credit and loans for storage shed financing. These options are especially attractive because they often feature promotional zero-interest offers and are more widely available to people with bad credit

You’ll need to be especially vigilant with these, however. Read all fine print carefully because many “gotchas” can be hidden in the details. 

A common detail to look for is deferred financing, where you won’t owe any interest if you repay everything before the financing period ends. If you don’t, you’ll be back-charged all the interest you thought you were saving, often at a higher rate than the average credit card offer.

A good option for:

  • Borrowers with bad credit 
  • Finding the best deal on financing a shed
  • When you’re disciplined enough to pay off the credit card within a specified timeframe

Not a good option for: 

  • Those who don’t take the time to read through the terms and conditions
  • Borrowers who can’t repay the line of credit before any promotional offers expire

Rent-to-own manufacturer financing

Some shed sellers offer rent-to-own financing in which you rent the shed with weekly or monthly payments. Eventually, you pay off the shed, and the company transfers full ownership to you. 

This option is similar to paying off a loan, but it’s marketed toward people with bad credit who may not qualify for shed loans. 

At first glance, it sounds great, but as with anything, there’s a catch: you’ll pay a lot more over time. Rent-to-own financing generally increases the cost of your purchase three- or four-fold, making them extremely expensive. 

Additionally, since you don’t own the shed until the end of the contract, you’ll lose all of that value if the lender repossesses it or you need to get rid of it. You won’t be able to sell it, pay off the remainder of your loan, or keep the leftover funds if you sell it.

What to look for in manufacturer financing

Not all types of storage shed financing are of the rent-to-own variety. Some shed manufacturers offer financing structured as loans or lines of credit. 

If you’re purchasing a ready-made shed from a builder, a loan is a better option because you’ll pay all the costs simultaneously. 

If you’ll be opting for manufacturer financing, here are a few things to keep in mind:

  • Look for loans with the lowest rates and fees.
  • Read the contract thoroughly, and don’t sign anything until you fully understand how it works.
  • Don’t be afraid to shop around with other lenders, which may have better financing offers.
  • Long-term loans can lower your monthly cost but may boost the long-term cost of the loan since you’ll be paying interest for longer.

How do I know which financing option is best?

It can be tough to choose the right storage shed financing option. If you’re unsure of what to choose, here’s a simple three-step process to guide you:

  1. Will you pay for all costs at once or spread out over time? Shed loans are better if you’ll be paying for everything upfront, while lines of credit are better if you’ll spread out individual purchases for the shed over a longer time. 
  2. What type of credit do you have? Check your credit score, which can guide you toward specific financing options and even certain lenders. 
  3. Do you have any home equity? If you have 20% or more equity in your home, consider whether you’re comfortable tapping into it for financing a shed. If not, consider personal loans or manufacturer lines of credit and loans. 

FAQs

Does an online lender or bank offer better financing than a manufacturer?

Sometimes. Manufacturers and home improvement stores often offer promotional financing to get you to make a purchase, which can be a good way to save money. Watch out for hidden terms in the contract, though, which can negate any savings you’ll get. 

Does the type of shed impact my financing options?

Yes. Some lenders have a minimum financing amount, and if you’re not buying an expensive-enough shed, you may be unable to take out that particular loan. 

In addition, if you’re building your own shed, you may miss out on any promotional financing offers from manufacturers.

Is it worth financing a shed?

It depends. If you can’t pay in cash, financing a shed can be a good option if it adds value to your life and if making those payments won’t set you back elsewhere in your budget. 

If you can afford the payments only by foregoing saving for an emergency fund or by withdrawing from your emergency fund to make the payments, it may not be worth it.