Updated
May 30, 2023 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.
In this guide:
- Septic tank financing options
- Average septic tank costs
- Should you use a personal loan to pay for a new septic tank?
- How much more expensive is a septic system with financing vs. cash?
- 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 | Key features |
| LightStream | Excellent credit | Minimum credit score: 660 Loans starting at $5,000 Rate Beat program |
| Upgrade | Fair credit | Minimum credit score: 620 Loans starting at $1,000 Check rates without hurting your credit score |
| Upstart | Thin credit | Minimum credit score: 300 Loans starting at $1,000 Get funds as soon as 1 business day |
| SoFi | Good credit | Minimum credit score: 650 Loans range from $5,000 – $100,000 Get funded the same day you’re approved |
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.
Best for excellent credit: LightStream
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
- Loan amounts: $5,000 – $100,000
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
- Origination fee: None
- Late fee: None
- Rates (APR): 7.99% – 25.99%
- Repayment terms: 24 – 144 months
Best for fair credit: Upgrade
Editorial rating: 4.9 out of 5
- Credit health tool to monitor your credit score and get personalized recommendations
- Loan amounts: $1,000 – $50,000
- 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
- Origination fee: 1.85% – 9.99%
- Late fee: Up to $10
- Rates (APR): 8.49% – 35.97%
- Repayment terms: 24 – 84 months
Best for thin credit: Upstart
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
- Loan amounts: $1,000 – $50,000
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
- Origination fee: 0% – 10%
- Late fee: 5% of the past-due amount or $15, whichever is greater
- Rates (APR): 6.70% – 35.99%
- Repayment terms: 36 – 60 months
Best for good credit: SoFi
Editorial rating: 5 out of 5
- Unemployment protection allows pausing loan payments in case of job loss
- Fast, easy application: Get a decision in minutes
- Loan amounts: $5,000 – $100,000
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 an APR as low as 8.99% and access SoFi’s robust borrower benefits, which include unemployment protection and financial planning services.
- Credit score category: Good
- Soft credit pull to check rates? Yes
- Deposit time: As soon as the same day you’re approved
- Origination fee: 0% – 6%
- Late fee: None
- Rates (APR): 8.99% – 23.43%
- Repayment terms: 2 – 7 years
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 associated with the loan.
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.