Home Improvement Finance

Pergola Financing: 3 Ways to Finance a Pergola Installation

Relaxing with family and friends outdoors allows you to enjoy the perks of Mother Nature. Install a pergola, and you can transform your yard into an inviting oasis. Read this guide for in-depth look at pergola installation costs.

But before you can take refuge under a pergola in the great outdoors, you need to figure out how to finance its installation. This guide walks you through the various ways to finance a pergola.

Pergola costs

According to HomeAdvisor Chief Economist, Brad Hunter, the average cost of building a pergola is $3,498. Hunter says, “Most homeowners pay $1,965 to $5,076.”

You can purchase prefab pergolas or hire a professional to build a custom design.”

He adds, “You can purchase prefab pergolas or hire a professional to build a custom design.” Two main factors affect the cost of a pergola: size and type of material used.

Here, Hunter shares how much you’ll pay for a standard-sized, 10×10-foot, professionally-built pergola. These are the most commonly used materials.

Natural materials
  • Cedar:$3,500 to $4,000/$500 for labor
  • Teak or IPE:$5,000 to $6,000/$750-$1000 for labor
Man-made materials/labor costs vary
  • Fiberglass:$20 to $30 per square foot
  • Vinyl:$15 to $25 per square foot
  • Cellular PVC: $30 to $45 per square foot
  • Aluminum:$65 or more per square foot

Now that you have an idea of the basic costs let’s take a look at three ways to finance a pergola installation.

1. Pergola Financing with equity in your home

Installing a pergola is a home improvement that creates an eye-catching retreat in your backyard.

To pay for this luxury, many people tap into the equity in their home using a home equity loan (HEL) or home equity line of credit (HELOC). Because your house is used as collateral, you can often get a low interest rate.

A HEL is a second loan on your home, in addition to the original mortgage. It’s generally for a smaller amount than the original loan and has a higher interest rate. You get the HEL loan in a lump-sum and pay it off over a set period of time. These loans usually have a fixed interest rate.

Because your house is used as collateral, you can often get a low interest rate.”

A HELOC is a line of credit, similar to a credit card. You can use it to take out as much as you want, up to your credit limit. You only make payments and pay interest on the amount you’ve taken out. HELOCs have a variable interest rate. That means your payment amount can fluctuate.

HELOC and HEL funds can be used for additional elements. For instance, you might want to add landscaping and additional hardscaping around the pergola. Read this article to see what return on investment you can expect from a pergola.

Home equity and pergola financing

Before you consider using a HEL or HELOC, check to see if you have sufficient equity in your home. This refers to how much your house is worth relative to outstanding loan amounts. Lenders will only grant a credit line if your home is worth more than you owe.

For instance, if the current appraised value of your home is $350,000, and you owe $295,000, you have $55,000 in equity.

Keep in mind that, since you use your home as collateral, you could lose your house if you don’t pay the loan as agreed. HELs and HELOCs also have fees. These include paying for a home appraisal. Check the fees against the interest savings to see if this is a good option for you.


Compare the pros and cons to make a better decision.

  • Low interest rates
  • Interest paid could be tax deductible
  • Only withdraw the amount you need
  • Pay interest just on the amount you borrow
  • There must be enough equity in your home
  • There are variable interest rates for most HELOCs
  • You’ll probably need to pay for an appraisal
  • The application process can be lengthy
  • You risk losing your home if you don’t pay

2. Use a personal loan to finance your pergola

A personal loan to finance your pergola is a good option. Personal loans are usually unsecured, which means you don’t have to put up any collateral.

The application process is easy and fast. Once you’ve been approved, the funds often appear in your account almost immediately.

If you have good credit (700+), you can qualify for a personal loan with a low interest rate. Typically, the shorter the repayment term you choose, the lower the interest rate.

Keep in mind that the lower your credit score, the higher the interest rate will be. There are also lenders that offer personal loans to borrowers with low credit scores. Be sure to check out what the best personal loans are to ensure that you choose the best option for you.


Compare the pros and cons to make a better decision.

  • Quick online application
  • Fast approval and funding
  • Competitive interest rates, with good credit
  • Ability to borrow with a low credit score
  • You can choose from multiple lenders
  • The lower your credit score, the higher the interest rate
  • The longer the payoff term, the higher the interest rate
  • Prepayment and loan origination fees are possible

3. Finance your pergola with a credit card

Depending on the price of the pergola, credit cards may be the answer. You can pay immediately if you already have a credit card. If not, applying for one is usually easy and quick. The problem is credit card interest rates can be high and you could easily pay more in interest than what the pergola is worth.

Only pay with a credit card if you can pay it off before the balance is due or if you have a 0% APR card. 0% introductory rate credit card. Many lenders offer no finance charges for 6 to 24 months. This gives you the chance to pay off the card before interest kicks in. You’ll probably only qualify for a 0% introductory rate cards if you have good credit (700+).

Calculate how much you’ll pay in interest based on how long it’ll take you to pay off the credit card. If you decide to use a credit card that charges interest, charge the least amount possible.


Compare the pros and cons to make a better decision.

  • If you already have a card, you can pay for the pergola immediately
  • There’s no set payoff term
  • Qualify for a 0% introductory rate card, if you have good credit
  • With interest, you could end up paying more than the pergola is worth
  • If you have a low credit score, you’ll pay high interest

Next steps for financing a pergola

To help you decide on the ideal pergola size and materials for your landscape, take a look at pergola contractors and brands. HomeAdvisor ProFinder allows you to quickly and easily search and compare reliable contractors.

Use SuperMoney’s loan offer engine to get pre-approved offers from leading lenders. With this tool, you can see what you qualify for without hurting your credit.

Then, compare the rates and terms of all the top lenders. Before you know it, you’ll be sitting under your new pergola in your backyard oasis.