A personal loan is a bit different than most other familiar loans, like a home or auto loan.
So, when do you use a personal loan? Well, a personal loan can be used for whatever need is in front of you. That’s what makes it unique.
Of course, it’s important to know when it's smart to use one and when you may want to wait.
If you’re hit with an emergency expense, it could be a resourceful alternative to high-interest options, like credit cards or payday loans. On the other hand, using it to finance a spur-of-the-moment luxury vacation or a $3,000 fireworks extravaganza for the neighborhood is probably not a wise move.
With that in mind, here are six examples where a personal loan may be a great option for your situation.
1. Use a personal loan to consolidate high-interest debt.
A personal loan could help you pay off your credit cards, consolidating what you owe to one simple payment each month. It could even help you lower the interest rate, saving you money or helping you pay off the debt quicker – or both.
2. Use a personal loan to pay unplanned expenses.
Life happens. And when it does, it can be expensive. Whether it’s dealing with a surprise furnace replacement or funeral expenses, a personal loan can help you get through whatever life throws your way.
Handle unexpected expenses with a personal loan
3. Use a personal loan to pay certain medical expenses.
It’s important to try to work with your insurance company or health care provider when hit with unexpected medical bills. But sometimes there are non-emergency situations where a personal loan makes sense – like fertility treatments or dental work, and more.
4. Use a personal loan to pay a tax bill.
No one likes paying taxes. But using a personal loan could be a less painful option than using high-interest credit cards to cover a surprise bill. Or, if you work in a business that has a high season, that personal loan could help you cover quarterly tax payments during the low season.
5. Use a personal loan to improve your home.
Maybe you want to spruce up the landscaping or redo the living room, but let’s say you haven’t paid on your home long enough to build up equity that could qualify you for a home equity loan. Or you simply don’t want to take out a home equity loan or turn to high-interest credit cards. A personal loan could be a good option. Of course, as with any home improvement project, make sure it’s adding to the value of your home before sinking money into it.
6. Use a personal loan to pay for a wedding.
It's a big moment in life and it comes with some big expenses, from the flowers and photographer to the cake and the caterer. A personal loan could take some stress away by spreading out costs over a few years.
There are all kinds of other uses for personal loans as well. When it makes sense, they can be used for everything from covering moving expenses and starting a small business to paying legal fees and even adopting a child.
If you’d like more information, visit our personal loan page. If you have more questions, just give us a call at (833) 450-1424 or send us an email. For more great help in understanding everything loan related, check out the Borrowing Like A Boss ebook.
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