A personal loan is a bit different than most of the loans we’re familiar with. For example, we know we use a home loan to buy a home. And an auto loan helps us buy a car.
But what about a personal loan? Well, a personal loan can be used for whatever need we may be facing. That’s what makes it unique.
Of course, it’s important to know when it’s smart to use one. And when it’s not-so-smart.
If you’re hit with an emergency expense, it could be a smart alternative to high-interest options like credit cards or payday loans. On the other hand, using it to finance a spur-of-the-moment trip to Tahiti or a $3,000 fireworks extravaganza for the cul-de-sac is probably not the wisest move.
With that in mind, here are 6 examples where a personal loan may be a great option for you and your situation.
1. Use a personal loan to consolidate high-interest debt.
A personal loan could help you pay off all 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 furnace that needs to be replaced to suddenly being faced with funeral expenses. A personal loan can help you get through whatever life throws down in front of you.
3. Use a personal loan to pay certain medical expenses.
It’s always good 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 would make sense – like getting fertility treatments or taking care of needed 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. And you don’t want to 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 you sink the money into it.
6. Use a personal loan to pay for a wedding.
It is a big moment in life. And it can come with some big expenses. From the flowers and photographer to the cake and the caterer. A personal loan could help take the stress out of pulling it all off by spreading costs out over a few years.
There are all kinds of other uses for personal loans as well. When it makes sense, they can be used to help do everything from cover moving expenses and start a small business to pay legal fees and even adopt a child.
If you’d like more information, visit our personal loan page. Or if you have questions, just give us a call at (833) 450-1424. Or, send us an email. And for more great help when it comes to understanding everything loan related, check out the Borrowing Like A Boss ebook.