Best home improvement loans in July 2025

Home improvement loan rates

Interest rates on personal loans for home improvement can vary widely, typically between 6.49% APR and 35.99% APR, depending on individual financial factors, market conditions, the specific lender, the loan amount, and the loan's repayment term.

When you apply for a loan, lenders consider your credit score, payment history, income, and outstanding debts. They also consider the loan amount you want to borrow as well as the repayment term. Higher loan amounts and longer repayment terms may carry higher interest rates.

But market conditions play a role too. The Federal Reserve may raise or lower interest rates to respond to inflation and other economic concerns. In turn, this affects interest rates on many types of loans, including personal loans.

The chart below shows the average prequalified APRs for borrowers on the Credible marketplace in each FICO credit score tier in May 2025, based on data from Credible. Prequalify with a handful of lenders to compare potential loan options, as each lender evaluates borrowers and sets rates differently.

Current personal loan rates by credit score

By the numbers

13.87% and 19.53%  — The average APRs on 3-year personal loans and 5-year personal loans, respectively, for Credible borrowers with 720 FICO scores and higher. Week ending June 29, 2025

How do home improvement loans work?

Most personal loans for home improvement are unsecured, unlike home equity loans, which come with a risk of foreclosure in the event of nonpayment. However, some personal loan lenders offer secured loan options that could have lower interest rates than unsecured loans. 

Personal loans for home improvement usually include the following features:

• Repayment terms: Most lenders require you to repay a personal loan within 7 years, but some lenders offer longer repayment terms. For example, LightStream offers home improvement loans with repayment terms up to 20 years. 
• Loan amounts: Some personal loan lenders offer up to $100,000 for qualified borrowers to finance home improvements. If you’re seeking a home equity loan, the loan amount is dependent on the amount of equity you have. Keep in mind, the amount you qualify for also depends on your credit score, income, and other financial factors. 
• Interest rates: Annual percentage rates (APRs) for personal loans, which account for the interest rate and upfront lender fees, typically range from 6.49% and 35.99%. The lowest rates are reserved for excellent credit borrowers, while borrowers with fair or poor credit tend to pay higher rates.
• Fees: Many lenders charge an origination fee for personal loans, which is deducted upfront from the loan proceeds. Origination fees typically range from less than 1% to as much as 12% of the loan amount (the fee is likely to be on the high end of the range if you have bad credit). Other fees can include late fees and insufficient funds fees. Some lenders, like Citibank, Discover, and LightStream, don’t charge any fees.  
• Funding times: Personal loans offer a speedy application process, and most lenders can distribute the funds directly to your bank account within a few business days of approval. Some lenders even offer funding as soon as the same day. Home equity loans can take over one month to approve and fund due to the home appraisal and other closing requirements. 

Related: How Do Personal Loans Work?

How to use a home improvement loan

You might use cash from a home improvement loan to pay contractors, buy paint, appliances, or fixtures, or purchase new furniture. The chart below shows some examples of common home improvement projects and their estimated average costs. Note that prices vary depending on where you live, the size of your home or scope of the project, the materials used, and other factors.

Note: When you apply for a personal loan for home improvement, you need to specify that as the purpose. Being specific can help you get enough money for your project, open up longer repayment terms, and potentially lower your rate. You’re obligated to use the loan for the purpose you stated to the lender when you applied.

Sources:

^[1]The Journal of Light Construction, “2024 Cost vs Value Report”

^[2]Angi, “How Much Does an Inground Pool Cost? [2025 Data]”

^[3]EnergySage, “Solar panel cost in 2025: It may be lower than you think”

^[4]Angi, “How Much Does Landscaping Cost? [2025 Data]”

^[5]Angi, “How Much Does HVAC Replacement Cost? [2025 Data]”

Home improvement loan pros and cons

Pros

• Cash to complete home renovations and repairs
• Lower interest rates than credit cards, on average
• Same-day home improvement loans may be available
• Repayment terms can extend up to 20 years
• Unsecured personal loans are available — if you don't have home equity for a home equity loan or don't want to use it
• Responsible repayment can improve your credit
• Your home’s value may increase by making improvements
• Interest on some loan types may be tax-deductible

Cons

• Your home is at risk if you default on a home equity loan or HELOC
• A long repayment term creates a long-term financial burden
• Home equity loans and HELOCs can take a month or more to approve
• Late payments can hurt your credit
• Home improvements may not increase your home’s value

Related: Should I Get a Personal Loan?

Home improvement loan rates by credit score

Below are average APRs on personal loans for home improvement, by credit score, according to Credible data on closed loans from June 2024 to May 2025:

• Excellent credit (800-850 FICO): 10.42%
• Very good credit (740-799 FICO): 13.22%
• Good credit (670-739 FICO): 21.73%
• Fair credit (580-669 FICO): 29.80%
• Bad credit (below 580 FICO): 32.35%

Home improvement is one of most common uses for personal loans on the Credible marketplace, after debt consolidation and credit card refinancing. In May 2025:

• More than 10% of people approved for a loan used it for home improvement.
• Nearly $12 million in home improvement loans were disbursed.
• The average home improvement loan was $20,267.

A closer look at the best home improvement loan lenders

Methodology

Credible’s rating criteria incorporates 899 data points across 31 partner and non-partner lenders, spanning interest rates, fees, loan terms, repayment options, customer service, eligibility, efficiency, options for poor credit and no credit, cosigner options, discounts, and more.

Read our full methodology

Where we get our data

Credible is a personal loans marketplace that partners directly with lenders to offer loans for a wide range of credit profiles and loan purposes. Because of these relationships, we have access to the most current interest rates that real borrowers are being approved for, along with average rates by credit score and loan purpose, approval rates overall and by lender, and more. The data we use is primary source data, updated weekly, and does not include any personally identifiable information about borrowers.