Financing your pole barn project can be a significant hurdle. This guide will walk you through how to finance a pole barn, including common loan options, payment scheduling, key considerations, and recommendations from pole barn companies. Investing in a pole barn can be an excellent addition to your property, providing a home for your animals, a storage space, or even a living area.
Common Types of Loans For Your Barn Project
Several pole barn financing options are available to suit different needs and financial situations. Typically, additions of this nature enhance the property value and there are often tax savings if the project is financed.
Home Equity Loans
Home equity loans allow homeowners to borrow against the equity they’ve built in their property. These loans often come with lower interest rates compared to personal loans. They are an excellent option if you have substantial equity in your home and need a lump sum of money to cover your pole barn project. Since the dramatic increase in home values since 2016, many homeowners have a large amount of equity in their home that can be used to add additional value to their properties.
Personal Loans
Personal loans are unsecured loans that can be used for almost any purpose. These loans typically do not require collateral, but they may come with higher interest rates than home equity loans. The terms and conditions will vary depending on your credit score and the lender’s policies.
Construction Loans
Construction loans are designed specifically for building projects. These short-term loans provide funds throughout the construction process, usually disbursed in stages as the project progresses. Once the construction is complete, the loan can often be converted into a traditional mortgage. Construction loans may be the best option if you’re building a larger pole barn or incorporating it into a more extensive property development plan.
Agricultural Loans
For those building a pole barn for farming or agricultural purposes, agricultural loans from institutions like the USDA or local Ag Banks can be an excellent choice. These loans often come with favorable terms for farmers and may include specific benefits for agricultural buildings.
Calculating Your Barn Project Payment Schedule
Creating a realistic payment schedule is important for managing your pole barn project finances. Here’s how you can calculate it:
Determine Total Project Cost
Start by obtaining detailed quotes from contractors or pole barn companies. Include costs for materials, labor, engineering, permits and any additional features like electrical, concrete, insulation, or equestrian equipment. This total gives you a clear picture of your financial commitment.
Choose Your Loan Option
Select the loan type that best suits your financial situation. Compare interest rates, repayment terms and any fees associated with the loan. Use loan calculators to understand your monthly payments and the total interest paid over the loan term.
Create a Payment Plan
Based on the loan terms, outline a payment plan that fits within your monthly budget and building plans. Keep in mind that you may need extra funds for unexpected expenses and incidentals such as clean-up, during construction.
Factors to Consider When Choosing Financing a Pole Barn
Interest Rates
Compare interest rates across different loan types and lenders. Even a slight difference in rates can significantly impact the total cost of your loan for your pole barn.
Loan Terms
Evaluate the loan terms for pole barn financing, including the repayment period, monthly payment amounts and any penalties for early repayment. Choose terms that align with your financial goals and budget.
Down Payment Requirements
Some loans require a down payment. It’s important to be sure you have the necessary funds available and consider how this upfront cost will affect your overall budget.
Lender Reputation
It’s a good idea to research lenders’ reputations. A reputable lender with good customer service can make the financing process smoother and less stressful. Getting recommendations from someone you know who’s completed a similar project is a good way to start your search. If you choose Peak Pole Barns to build for you, we are happy to connect you with prior customers as references.
Pole Barn Companies That Finance: Our Recommendations
Many pole barn companies offer financing options to make the building process more accessible. Peak Pole Barns and Manufacturing recommends HFS Home Improvement Loans.
HFS Home Improvement Loans offers an extensive list of unique loan programs and world-class service, with over 1,500 5-star reviews. Their platform provides personal loans, eliminating the need for equity, and all loans fund 100% Direct-to-Consumer. HFS conducts a soft credit check to present comprehensive loan options with no impact on your credit. Whether you’re financing the barn, shop, landscaping, or any other home improvement project, HFS is the most trusted financing partner in the industry. To learn more about how to finance a pole barn, contact us today!