Shed Loans: Compare Your Options
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The end of the summer can be a great time of year for building an outdoor shed. The weather is still nice, and you might need a place to store things like lawn care tools over the winter months.
Sheds, however, can be surprisingly expensive. So you might need to consider taking out a loan to cover shed expenses.
On this page:
Costs Involved in Buying and Building an Outdoor Shed
The average cost for an outdoor shed is about $2,750. Depending on the size, materials, and finishing, costs can range from about $1,500 to $4,000, according to HomeAdvisor.
The total cost of building a shed includes leveling and preparing the ground or foundation of the shed, materials, tools, and labor costs if you are not going to build the shed yourself.
Personal Loans for an Outdoor Shed
Since personal loans can be used for almost anything, they are one of the most common ways that homeowners finance the purchase of an outdoor shed.
A personal loan is usually an unsecured loan, which means that there is not an asset serving as collateral to the lender. As a result, interest rates on personal loans can be higher than they are on secured loans, like home equity loans. They are, however, usually cheaper than the average interest rate on a credit card.
The rates and terms on personal loans can vary a lot among lenders, so it is important to do your research and shop around to find the right loan for you. Lenders evaluate your loan application based on a number of factors, but your credit score is likely the most important indicator of whether or not you will be approved.
If you have a credit score of 720 or higher, you shouldn’t have a hard time getting approved for a personal loan with competitive terms. Without a good credit score, however, you will have to look harder to find a lender willing to lend to you.
As you narrow down your list of potential lenders, look at how the interest rate and loan maturity affect your monthly loan payment. Also, don’t forget to consider the cost of the lender’s origination fees.
Lenders Offering Loans for Shed Financing
LightStream
Rates (APR)
4.99% – 19.99%*
with AutoPay
Loan Amounts
$5,000 – $100,000
Credit Score
660+
LightStream offers a loan specifically for home improvements. The lender has low rates, no fees, and a Rate Beat program in which they will beat any rate a competitor offers by 0.10 percentage points.** If you have excellent or good credit, LightStream is a great option.
- Credit score category: Excellent, good
- Soft credit pull to check rates: Not available
- Deposit time: As soon as the same day
- Origination fee: 0%
- Late fee: None
- Discounts: 0.50% interest rate reduction for enrolling in autopay
- Repayment terms: 24 – 144 months***
Upgrade
Rates (APR)
7.99% – 35.97%
Loan Amounts
$1,000 – $35,000
Credit Score
620+
Upgrade is a great option for borrowers with bad or fair credit, as well as those that need smaller loans. You can check rates without affecting your credit score and eligibility is based more on free cash flow as compared to other lenders.
- Credit score category: Fair, bad
- Soft credit pull to check rates: Yes
- Deposit time: As soon as the next day
- Origination fee: 2.9% – 8%
- Late fee: $10
- Repayment terms: 36 or 60 months
Upstart
Rates (APR)
8.41% – 35.99%1
Loan Amounts
$1,000 – $50,0002
Credit Score
600+
Upstart is an online lending platform that partners with banks to provide personal loans that can be used for almost anything. Upstart’s lending model considers education, employment, and many other variables when determining eligibility.3 This model leads to 27% more approvals and 16% lower rates than traditional models.4
- Credit score category: Fair, bad
- Soft credit pull to check rates: Yes
- Deposit time: As fast as one business day
- Origination fee: 0% – 8%
- Late fee: $15 or 5% of payment
- Repayment terms: 36 or 60 months
If you want to compare other options, you can check out our picks on the pages below:
- Best Personal Loans Overall
- Best Home Improvement Loans
- Best Personal Loans for Fair Credit
- Best Personal Loans for Bad Credit
Other Methods of Financing a Shed
Home Equity Loans
If the interest on a personal loan seems too expensive, a home equity loan or home equity line of credit (HELOC) might be better options for financing your shed. Both the home equity loan and HELOC let you borrow against the amount of equity you currently have in your home.
Since your home serves as collateral for the loan or line of credit, lenders consider these loans to be less risky and charge lower interest rates than they do on personal loans. So your monthly payment could be lower than it would with a personal loan.
On the other hand, lenders also charge relatively high origination fees on a home equity loan or HELOC that can range from 2% to 5% of the loan amount. Having your home serve as the collateral also means that the lender can foreclose on your home if you can’t make the loan payments.
Paying With Cash
Saving your money and buying the shed outright can be the most affordable option. You only pay for the cost of the shed rather than paying hundreds to thousands of extra dollars in origination fees and interest. Although you may want the shed now, you’ll save a lot of money in the long run by waiting a few months to save the cash.
Manufacturer Financing
Alternatively, you might be able to get a line of credit from the shed manufacturer. Some offer 0% interest as long as you pay off the entire amount within a few months. If you get an offer like this, however, it is important to make sure you pay the entire balance in time to avoid interest charges going back to the date of purchase. A line of credit from a manufacturer usually has interest rates that are in line with credit card interest rates.
Consider the Overall Costs Before Taking Out a Shed Loan
If you are thinking about building an outdoor shed, you’ll find many options. Some sheds are small and utilitarian, while others are large enough to double as a living space. The cost can thus range from a few hundred dollars to thousands.
Be sure to take choose a shed that fits your budget and if you need additional financing, the options mentioned above can be a good place to start. Which of those options is right for you depends on your personal financial situation and the total cost of the shed. Research all of the costs associated with each option before you make your decision.
*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.
**LightStream will offer a rate .10 percentage points lower than the rate offered on any competing lender’s unsecured loan provided that you were approved for that lower rate (with the same loan terms offered by LightStream) no later than 2 p.m. Eastern time two business days prior to loan funding. The Rate Beat Program excludes secured or collateralized loan offers from any lender, and the competitive offer must be available to any customer with a similar credit profile. Terms are subject to change at any time.
If you believe you have been approved by another lender for a lower qualifying rate, contact LightStream customer service. We will work with you to determine your Rate Beat eligibility and obtain the necessary documentation.
***Payment example: Monthly payments for a $10,000 loan at 5.95% APR with a term of three years would result in 36 monthly payments of $303.99.
1The 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.
2Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5100. The minimum loan amount in GA is $3,100.
3Although educational information is collected as part of Upstart’s rate check process, neither Upstart nor its bank partners have a minimum educational attainment requirement in order to be eligible for a loan.
4Approval numbers compare the 2020 loan approval rate by the Upstart model and a hypothetical traditional credit decision model. The APR calculation compares the two models based on the average APR offered to borrowers up to the same approval rate. The hypothetical traditional model used in Upstart’s analyses was developed in connection with the CFPB No Action Letter access-to-credit testing program, is trained on Upstart platform data, uses logistic regression and considers traditional application and credit file variables.
