For many families, personal loans are no longer reserved for financial emergencies. Instead, they’re becoming a common way to finance life’s biggest expenses, from home renovations to dream vacations.
According to new research from digital personal finance company Achieve, more than one-third of American adults now have at least one personal loan, highlighting how borrowing has become part of everyday financial planning.
Personal Loan Use Continues to Climb
Personal loan ownership has steadily increased since 2017, and today 38% of American adults have at least one personal loan on their credit report.
The study also found there are now 67.5 million personal loans listed on consumers’ credit reports—a 7% increase over the previous year.
As mortgage interest rates begin to ease, experts also expect more Americans to pursue homeownership, adding mortgages to their long-term financial plans.
Major Purchases Lead the Way
The biggest reason Americans are borrowing money? Large purchases.
Whether it’s buying a vehicle, paying for a wedding, or covering another significant expense, the percentage of people taking out loans for major purchases has grown substantially.
- 2024: 32%
- 2026: 42%
That’s a 10-point increase in just two years, showing that more households are choosing financing instead of delaying major life events.
Home Improvement Projects Are Worth the Investment
Home improvement loans have also seen impressive growth.
Exactly one-third of survey respondents now say home renovations are a worthwhile reason to borrow money, up from 23% just two years ago.
With many homeowners choosing to improve their existing homes instead of moving, financing projects like kitchen remodels, bathroom updates, and outdoor living spaces has become increasingly common.
Emergency and Medical Costs Still Drive Borrowing
While many loans are funding future goals, unexpected expenses remain a significant reason Americans borrow.
The study found:
- 35% would consider a personal loan for emergency expenses.
- 20% would borrow to cover medical bills.
The encouraging news is that most Americans still prefer to pay medical expenses out of pocket whenever possible, with roughly four out of five relying on their own budgets first.
Vacation Loans Are Becoming More Popular
Travel remains a priority despite rising costs.
The percentage of Americans who believe a vacation is a good reason to take out a personal loan increased from 13% to 21% over the past two years.
While making memories is important, financing a vacation is something to approach carefully. Borrowing for experiences means you’ll likely still be making payments long after the trip has ended.
Education Remains a Top Borrowing Priority
Education continues to be one of the most researched types of loans online.
Millions of Americans searched for information about education loans this year, demonstrating that investing in future earning potential remains a priority for many families.
What This Means for Your Budget
Personal loans can be useful financial tools when used responsibly, especially for expenses that add long-term value, such as education or necessary home improvements.
However, before borrowing, it’s worth asking yourself a few important questions:
- Can this purchase wait while I save?
- Will the loan improve my long-term financial situation?
- Can I comfortably afford the monthly payments?
- Have I compared interest rates and loan terms?
A personal loan should fit into your financial plan—not become a burden that makes future budgeting more difficult.
The Bottom Line
The research suggests Americans are increasingly viewing personal loans as a way to reach financial goals rather than simply cover emergencies. Whether it’s renovating a home, earning a degree, purchasing a vehicle, or planning a vacation, borrowing has become part of many households’ financial strategies.
At Champagne Style Bare Budget, we’re all about making informed financial decisions. Borrowing isn’t inherently good or bad—it simply needs to be done with a clear understanding of the costs, your budget, and your long-term goals. Sometimes waiting, saving, and paying cash can be the most rewarding investment of all.
