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Installing a fence can provide security and increase your home’s value. But, depending on the type of fence you choose and the size of your property, the costs can add up. If you don’t have the money to pay for it upfront, you might be wondering how you can finance a fence.Fortunately, there are several options to help you afford fence installation or repair. Read on to learn about fence financing and how it works.
Typical Costs Associated With Fence Building or Repair
Fence building and repair costs can vary depending on the type of project you’re doing and the materials you’re using. If you’re repairing an existing fence, the average cost can range from $250 to $750.The specifics of your repairs, including the extent of the damage to the fence and the labor costs, will determine the final price tag. Fence improvement tips may help as you’re deciding what kinds of repairs to make.Putting up a new fence is more expensive than repairing an existing one. The national average cost is $3,216, but the price can range from $1,856 to $4,758. Factors such as permits, labor, materials, and preparing the ground will impact the final cost. If you’re doing home remodeling, you may want to include the cost of a new fence in your home renovation budget.
Credit Score Requirements for Financing a Fence
Fence financing options come with different credit stipulations. Your needs and financial circumstances can help you decide which is best for you. Your credit score is one of the important requirements for personal loans. While different lenders have different minimum credit score requirements, typically, the higher your credit score, the better the rate and terms you can get. With other types of financing, such as a home equity line of credit (HELOC) or a home equity loan, a higher credit score will also generally help you get a more competitive interest rate. However, if your financial situation is strong overall, you may still qualify. Other factors, such as your debt-to-income ratio (DTI), which is how your monthly income compares to your monthly debt payments, will also affect your eligibility.Recommended: Credit Scores: What’s Involved in Calculating and Building Your Credit
Fence Financing for Bad Credit
While it’s typically more challenging to qualify for financing if your credit score is low, there are fence financing options available for those with bad credit. For instance, you may be able to get a secured personal loan that’s backed by collateral. Or, if you have substantial equity in your home and a good income, you may qualify for a home equity loan or HELOC. Recommended: Home Equity Loans vs Personal Loans: Which One Is Right for You?
Options for Privacy Fence Financing
Credit Card
Depending on the cost of your fence installation, you may be able to cover it with your credit card. And if you have a rewards credit card, you might get perks such as cash back or points that you can redeem for things like travel.However, you’ll need to make sure that the available line of credit on your card is high enough to cover the cost of a fence. Also, if you can’t pay off the fence before your credit card billing cycle ends, you’ll have to pay interest on what you owe, and credit card interest rates tend to be high. Another option is to apply for a new credit card with a 0% promotional APR (annual percentage rate). As long as you pay off the cost of the fence before the promotional period ends, which is usually several months or a year, you won’t owe interest. However, if you don’t repay it in that timeframe, you’ll need to pay interest, and the rate could be high.
Home Equity Line Of Credit (HELOC)
A home equity line of credit (HELOC) lets you access approximately 60% to 85% of the equity you have in your home for a maximum of 10 years, known as the draw period. During this period, you can borrow funds as needed to pay for your fencing project. Once the draw period expires, you enter a repayment phase of approximately 20 years to pay back what you owe.However, there are disadvantages to consider. The interest rates on HELOCs aren’t fixed, so they could rise, along with your monthly payments. And because a HELOC uses your home as collateral, if you fail to repay what you owe, you could lose your house.
Home Equity Loan
With a home equity loan, you can generally use 75% to 85% of the equity in your home to borrow money for financing your fence. The interest rate is fixed, which means your payments won’t change, and you may have up to 30 years to repay it. Home equity loans typically have numerous fees, such as closing costs of 2% to 5% of the amount you borrow and home appraisal fees. In addition, the equity in your home will be diminished, meaning that it will likely take you longer to repay your mortgage. And because, like a HELOC, a home equity loan uses your home as collateral, the lender could seize your house if you fail to repay the loan.
Retailers
Fence retailers and installers sometimes offer financing for fencing. You may be able to secure a lower interest rate with this option, or find a special offer that charges no interest as long as you repay what you owe in a specific period of time. However, be sure to read the fine print carefully. With some retailer fencing options, if you don’t pay off the full amount you owe within the specified timeframe, you’ll be charged interest on your account starting on the date you bought the fence.
Cash
By using cash to pay for your fence installation, you’ll avoid any interest or fees, which saves you money. In addition, a fence installer might offer you a better price if you pay in cash. But there are drawbacks. A large expense can eat up your savings, which could be a problem if an emergency or unexpected expense crops up. Also, it may take you a while to save up enough to pay for the fence in full, which means you might have to delay the project.
Personal Loans
A personal loan is another option for fence financing. With a personal loan, you borrow money from a bank, online lender, or credit union. Once you’re approved, you get a lump sum that you repay with interest in installments over time. The higher your credit score, the lower the interest rate you might qualify for. Once you’re approved for a personal loan, you often receive funds quickly, typically within one to five days. Personal loans are flexible and can be used for almost any purpose, such as home improvement loans. These types of loans are typically unsecured, which means they don’t require collateral. However, the interest rates on personal loans may be high. Also, be aware that lenders will look at your credit score and run a hard credit check when you submit your application, which can temporarily lower your score.
Pros & Cons of Fence Financing
Installing a fence provides many perks, including security and curb appeal. Fence financing can help you cover the cost of installing a fence, but it does have advantages and disadvantages.
Pros of Financing a Fence
You spread out the cost with monthly payments over time
You can get the project done right away rather than waiting to save up for it
Making payments on time can build your credit score
You can designate your cash for other priorities
Cons of Financing a Fence
Repaying what you borrowed may strain your budget
You may pay interest and fees
The size of the expense and any late or missed payments might lower your credit
With a HELOC or home equity loan, you could lose your house if you default on the loan
If you’re shopping for a personal loan for fence installation or repairs, Lantern by SoFi can simplify the process. In our online marketplace, you can quickly and easily compare terms and rates for personal loans from multiple lenders to help find the best option for your needs. Find and compare personal loan options with Lantern.
Frequently Asked Questions
What are the typical requirements for financing a fence?
Can you finance a privacy fence?
What are the options available for fence financing?
Photo credit: iStock/ghornephoto
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About the Author
Ashley Kilroy
Ashley Kilroy is a personal finance expert with years of experience in radio, newspapers, magazines, and online content. Her work has appeared on websites including Forbes and Yahoo Finance. Ashley writes on a variety of personal finance topics for SoFi, including student loans, taxes, and insurance.
