Septic Tank Costs & Financing Options

Being a homeowner often brings unexpected expenses that you may not be prepared to pay for. Having issues with your septic tank is among the most common.

Septic tanks are designed to last for many years, with concrete models intended to work for up to 40 years. However, homeowners with older properties may be more at risk of a septic tank failure. It may be necessary to repair or update a septic tank before a complete breakdown.

Here are some options you can use to pay for septic tank repairs or replacements, as well as some average cost information.

On this page:

• Using a Personal Loans
• Using Home Equity
• Using Savings
• Average Costs

Options for Financing a New Septic Tank

Personal Loans

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For many homeowners, using a personal loan is a common method for financing a new septic tank or repairs to an old unit.

Personal loans are a single lump sum paid to the homeowner (that can be used for just about anything), who then makes monthly payments with fixed interest until it is repaid. Personal loans are the most common form of home improvement loans, in general. The best personal loan interest rates usually range from around a low of 4.99% to a high of 35.89%.

Most personal loans require a credit check, and in some cases, income verification, so not every homeowner will easily qualify. Also, homeowners should review the affordability of the monthly principal and interest payment, the timeframe of the loan, and the total amount of interest paid over time. These details help you determine if a personal loan for a septic tank expense makes sense for you.

Home Equity

Another option for financing septic tank expenses is through home equity, either as a line of credit or a loan. Home equity is simply the difference between the market value of the home and the balance still owed on a mortgage loan. 

A home equity line of credit, known as a HELOC, offers flexible financing over time, as the credit line can be used more than once. As of this writing, HELOC interest rates range from a low of 4.99% to a high of 13.74%.

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A home equity loan is similar to a personal loan, but it uses the property as collateral. Homeowners still will need a credit check and potentially a verification of income to qualify, in addition to having available equity in the home. As of this writing, home equity loan rates range from a low 4.09% to a high of 11.99%.

A home equity financing solution may make sense for those with enough equity to qualify, or those who have a large financing need. However, a septic tank repair or replacement is usually small enough that a home equity loan or line of credit is not needed.

Both home equity financing options may require an appraisal, closing costs for the new loan or credit line, and interest charges that are either variable or fixed. In contrast, personal loans are typically unsecured and would not require an appraisal.

Savings

The most affordable option for covering the cost of a septic tank replacement or repair is through your own savings. That’s because there are no extra costs like interest charges, closing costs, or credit check.

However, many homeowners do not have several thousand dollars set aside for home emergencies, making a personal loan or home equity financing an easier solution. Establishing a home savings account now may make it more affordable to pay for these kinds of repairs in the future.

Average Septic Tank Costs

The cost to replace an existing septic tank can range from $3,000 up to $8,000, but a smaller repair may cost between $300 and $4,000. These amounts include several expenses, including:

• Labor for a repair person
• Tools used to repair or replace the tank
• Materials and parts needed for the septic tank
• Excavation for the land around the septic system

Although the total cost for replacing or repairing a septic tank varies from home to home, it’s often a significant expense that is not easy to manage. Below are some options for paying for this cost.

Bottom Line

Homeowners should take time to understand the total cost of septic tank repair or replacement first, and then select the financing solution that makes the most sense for their financial circumstances.

Personal loans and home equity products are often used to pay for septic tank replacement or repairs. When possible, consumers should consider using savings or an emergency fund to cover the costs.