Septic Tank Loans & Other Financing Options

Houses that aren’t connected to a municipal sewer system rely on septic tanks, which can last 30 years or more with proper maintenance. If your septic system is nearing the end of its life or you want to replace it before selling your home, you may be exploring septic tank loans and other financing options. 

Replacing a septic tank system can average $3,472 to $11,104, but costs can hit $25,000 or more. We’ve researched options to finance your septic tank and spread out this cost over time. 

These septic tank funding options include personal loans for excellent, good, fair, and thin credit. Read on for a closer look at how you can cover this hefty cost. 

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• Borrow up to 90% after-renovation value or 150% of current LTV.
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• Compare HELOC, HELOAN, and Personal Loan offers
• Borrow $25,000 to $750,000
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Table of Contents

1. Septic tank financing options
   1. Best for excellent credit: LightStream
   2. Best for fair credit: Upgrade
   3. Best for thin credit: Upstart
   4. Best for good credit: SoFi
2. Average septic tank costs
3. Should you use a personal loan to pay for a new septic tank?
4. How much more expensive will a septic system be with financing vs. cash?
5. Are there financial benefits if I improve my home with a new septic system?

Septic tank financing options

From taking out a personal loan to drawing on your home equity to accessing state and federal funding, here are your options for financing a septic tank replacement or repair. 

Personal loans

Lender	Best for	Loan amounts
LightStream	Excellent credit	$5,000 – $100,000
Upgrade	Fair credit	$1,000 – $50,000
Upstart	Thin credit	$1,000 – $50,000
SoFi	Good credit	$5,000 – $100,000

Personal loans are flexible forms of financing you can use for almost any purpose, including septic tank replacement and other home improvements. You get a lump sum upfront when you take out a home improvement personal loan. 

You’ll often repay your personal loan with fixed monthly payments over a set period, often anywhere from one to seven years. Personal loans also tend to come with fixed interest rates. 

Most personal loans are unsecured, and you must meet a lender’s credit and income requirements to qualify. Borrowers with the strongest credit often get the lowest rates. Some lenders are more flexible than others when it comes to credit requirements. 

If you want to explore your options, we’ve got you covered. Read on for our personal loan recommendations, including interest rates, repayment terms, and other loan features. 

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Best for excellent credit: LightStream

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Editorial rating: 4.8 out of 5

• Rate Beat program: Will beat a competitor’s offer by 0.10% APR if approved for a lower rate elsewhere
• Unique satisfaction guarantee: Borrowers who are not satisfied with their loan experience can get a $100 refund
• No fees

LightStream offers personal loans up to $100,000, which you could get the day it approves your application. You’ll need good to excellent credit to qualify. Approved applicants may be able to select loan terms as long as 12 years. 

Unlike many other online lenders, LightStream doesn’t offer the option to prequalify for a loan. You’ll have to submit a complete application to see your rates, which could involve a hard credit inquiry. 

• Credit score category: Good to excellent  (660+)
• Soft credit pull to check rates? No
• Deposit time: Same day as approval 
• Rates (APR): 7.99% – 25.99% 

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Best for fair credit: Upgrade

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Editorial rating: 4.9 out of 5

• Credit health tool to monitor your credit score and get personalized recommendations
• Origination fee of 1.85% – 9.99% of loan amount
• 15-day grace period before late fee is assessed

Upgrade offers personal loans up to $50,000 to qualifying borrowers with credit scores of 620 and up. If you borrow from Upgrade, you have the option to stretch your repayment term up to seven years. 

Upgrade charges an origination fee between 1.85% and 9.99% of your loan amount, which it will deduct from the amount you borrow, or you may pay it out of pocket. Payments over 15 days late will also incur late fees of up to $10. 

• Credit score category: Fair (560+)
• Soft credit pull to check rates? Yes 
• Deposit time: Within one day of clearing verifications 
• Rates (APR): 8.49% – 35.97% 

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Best for thin credit: Upstart

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Editorial rating: 4.8 out of 5

• Uses artificial intelligence to provide competitive rates based on unique creditworthiness
• Checking your rate won’t affect your credit score
• Origination fee of 0% – 10% may apply

If you have thin (i.e., little to no) credit, you’re not out of personal loan options. Upstart’s credit score requirement is just 300, the lowest score possible, making its loan accessible to a wide range of borrowers. You can borrow up to $50,000, and access rates starting at 6.7%. 

Remember, however, you may pay an origination fee equal to up to 10% of your loan amount. If you don’t pay the fee out of pocket, Upstart will subtract the fee from your loan proceeds, so you may get a smaller amount than you requested. 

• Credit score category: May accept poor credit 
• Soft credit pull to check rates? Yes 
• Deposit time: One business day after signing 
• Rates (APR): 6.70% – 35.99%

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Best for good credit: SoFi

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Editorial rating: 5 out of 5

• Fast, easy application: Get a decision in minutes
• No fees required

SoFi offers personal loans up to $100,000, with repayment terms as long as seven years. This online lender offers prequalification, so you can check your rates in just 60 seconds. After you apply, you could get your loan funds the same day you’re approved. 

If you can meet SoFi’s credit requirements, you could qualify for a fixed APR as low as 8.99%. 

• Credit score category: Good 
• Soft credit pull to check rates? Yes 
• Deposit time: As soon as the same day you’re approved 
• Fixed rates (APR): 8.99% – 23.43% with all discounts

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Home equity

Homeowners can also consider borrowing against their home equity to finance a septic tank with a home equity loan or line of credit (HELOC). Your home secures both, so you risk foreclosure if you can’t pay them back. 

Home equity loans are similar to personal loans because they provide a lump sum upfront, which you pay off over time with fixed monthly payments. HELOCs, on the other hand, are more similar to credit cards. They offer a revolving line of credit you can draw on as needed and pay off as you go. 

You’ll need enough equity in your home—often at least 10%—to qualify for both types of loans. Along with checking your credit, a lender may require a home appraisal and charge closing costs. 

	Home equity loan	HELOC
Interest rate type	Often fixed	Often variable
Receiving funds	Lump sum upfront	Revolving credit you can draw on as needed
Repayment terms	5 – 30 years	Often a 10-year draw period, followed by a 20-year repayment period

>>Read more: Home equity loan uses

State and federal funding

Before borrowing a septic tank loan, check whether you qualify for state or federal assistance. The EPA Clean Water State Revolving Fund (CWSRF) provides grants to residents of all 50 states and Puerto Rico to offer low-interest loans to eligible residents who need to replace or repair their septic tank systems. 

Below are examples of state assistance programs, but check your state’s website for additional opportunities. 

State	Program details
Florida	Low-interest loans with long repayment terms of up to 40 years
Massachusetts	Tax credit for up to 40% of septic tank costs
New Hampshire	USDA Single Family Housing Repair loans and grants to low-income homeowners
New York	Grants will cover up to 50% of septic tank costs (for up to $10,000)

The federal government also has low-interest loan and grant programs for qualifying low-income homeowners: 

• Rural Home Loans Program
• Single-Family Housing Repair Loans and Grants Program (Check state-specific information here.)
• Rural Decentralized Water Systems Grant Program 

Average septic tank costs

The average cost to replace a septic system ranges from $3,472 to $11,104. A complete system build can cost between $10,000 and $25,000. 

The costs include expenses such as: 

• Labor costs 
• Materials and parts 
• Land excavation 

Costs can vary depending on your home size and location, but replacing a septic system is a significant expense that often requires financing. 

Should you use a personal loan to pay for a new septic tank?

Depending on your situation, a personal loan for a new septic tank can make sense. Not everyone has the funds to cover the costs upfront. Even if you do, you might not want to drain your bank account to cover this home repair. 

A personal loan can provide the funds you need to pay for the project and pay it off over time. The drawback of borrowing a personal loan is paying interest and fees. 

It’s worth using a personal loan calculator before you borrow to determine your monthly payments and long-term interest costs. 

Remember: Missing payments on your loan could lead to late fees and damage your credit. 

How much more expensive will a septic system be with financing vs. cash?

Financing a septic system will be more expensive than paying cash due to interest charges. You can use a loan calculator to determine your long-term costs of borrowing. 

Let’s say, for example, you borrow a $5,000 personal loan at a 10% rate. On a five-year repayment term, you’d pay $1,374 in total interest charges, raising your total costs to $6,374. 

If you can pay for the septic system upfront, you won’t need to pay these additional interest costs, but you won’t have the flexibility of spreading the cost out over time. 

Are there financial benefits if I improve my home with a new septic system?

There are no federal tax benefits for replacing your septic system, but certain states offer tax credits, grants, and low-interest loans. Massachusetts, for example, provides a tax credit of up to 40% of the project costs or $15,000 to qualifying homeowners. 

Updating your septic tank could also improve the value of your home if you sell. Plus, some states require upgrading a broken-down septic system before you can sell your home.