Best Personal Loans for Home Improvements

In today’s competitive housing market, homeowners are seeking innovative ways to fund renovations and repairs. A personal loan can provide the necessary capital for projects ranging from minor upgrades to major overhauls. With varied terms, rates, and lender options available in May 2025, understanding how to navigate this landscape is essential for a successful remodel.

Current Market Overview

Personal loans for home improvement typically have APRs ranging from approximately 7% to 36%. As of May 2025, average personal loan rates based on credit score are:

Excellent credit (720-850): 13.88%
Good credit (690-719): 15.38%
Fair credit (630-689): 19.77%
Bad credit (300-629): 19.83%

These figures reflect factors such as income, credit history, and lender policies. The Federal Reserve’s actions on interest rates also influence the broader market and individual offers. Choosing the right loan depends on balancing rate, term, and projected monthly payments, ensuring affordability throughout the life of the loan.

Top Lenders for Home Improvement Loans

Several lenders stand out in the May 2025 market, each catering to different borrower profiles. Compare these options to find your best fit:

• LightStream: No fees, low rates, terms up to 12 years, ideal for large projects.
• SoFi: Attractive terms for borrowers with strong credit, flexible payment options.
• Discover: Known for customer service and debt consolidation solutions.
• Achieve: Specializes in joint loans to combine incomes and improve approval odds.
• Best Egg: Provides secured loans with lower interest rates.
• Wells Fargo: Offers rates starting at 6.99% APR including a relationship discount.

Loan Terms and Amounts

Most lenders provide fixed interest rates and monthly payments over terms from 12 to 84 months. Some, like LightStream, extend up to 144 months. Loan amounts range from $3,000 to $100,000, giving homeowners the freedom to finance minor repairs or major remodels. For example, Wells Fargo offers a representative example for $16,000 at 12.99% APR over 36 months, resulting in a $539 monthly payment.

Types of Home Improvement Financing

Beyond standard personal loans, consider these alternatives for specific needs:

• Home Equity Loans: Fixed-rate, secured by your home’s equity.
• Home Equity Lines of Credit (HELOCs): Revolving credit line tied to equity.
• Cash-Out Refinance: Refinance your mortgage to access extra cash.
• FHA 203k Renovation Loans: Government-backed option for comprehensive projects.

Pros and Cons of Personal Loans for Home Improvement

Understanding the advantages and drawbacks helps you choose wisely:

Where to Get Home Improvement Loans

You have multiple sources for personal loans, each with unique strengths. banks with in-person support are ideal for borrowers who value face-to-face advice. Credit unions often deliver lower APRs and flexible terms for members. Online lenders provide rapid applications and the convenience of comparing multiple offers from one dashboard. Always review prequalification options to check your rate without impacting your credit score.

Types of Projects Covered

• Home repairs: roofs, siding, foundation fixes.
• Kitchen and bathroom remodeling.
• HVAC replacement and upgrades.
• Energy-efficient solar panel installation.
• Landscaping, driveways, and outdoor living spaces.

Application Process and Key Considerations

To maximize your chances of approval and secure the best terms, follow these guidelines:

1. Compare offers from multiple lenders to understand rate variations.

2. Obtain estimates from three to four contractors to develop comprehensive project cost estimates and avoid budget surprises.

3. Calculate monthly payments using different APRs and terms to find a comfortable fit.

4. Check your credit report for errors and work on improving your score; income and credit history are critical factors in your APR.

5. Review all fees, including origination charges and prepayment penalties, to ensure there are no hidden costs.

Current Rate Ranges by Lender

In May 2025, borrowers can expect rates from several lenders:

Many offer 9.96% to 23.48% APR for 3-10 year terms. Others advertise 9.99% to 35.99% APR for 3-5 years. Additional options include 11.49% to 20.49% APR for 1-5 year terms, while specialty lenders may range from 18.00% to 35.99% APR for 2-5 years. Carefully evaluate each offer to balance rate, term, and monthly budget.

Putting It All Together

Choosing the best personal loan for home improvements requires careful planning, research, and a clear understanding of your financial picture. By comparing offers, understanding competitive APRs ranging from moderate to high, and securing accurate cost estimates, you can transform your home with confidence.

Whether you’re repairing a roof, remodeling your kitchen, or installing energy-efficient systems, the right personal loan can fund your vision and boost your property’s value. With thorough preparation and an informed approach, you’ll secure fast funding and flexible repayment, making your renovation goals achievable and rewarding.