5 Common Uses for a Personal Loan

In a financial pinch and need an influx of money? A personal loan can save the day. Where credit cards once reigned supreme, more and more people are now turning to personal loans to assist with their financial needs, thanks to the newfound accessibility of loan options and the competitive rates they offer.

Here, we go over five popular ways consumers are choosing to spend these funds. If you're wondering what you could use a personal loan for, we've got you covered.

Debt Consolidation

Because personal loans typically have lower interest rates than credit cards do, they are a popular option when it comes to consolidating debt. In fact, debt consolidation accounts for 65 percent of personal loan borrowers.

By paying off other debts and balances and only having to focus on one payment, that payment becomes easier to manage. It can be very difficult to keep track of a multitude of payment schedules and corresponding APRs. If you're currently juggling a variety of bills, it might be time to consider a personal loan for debt consolidation purposes.

Tackling a Home Improvement Project

Another popular personal loan use? A large home improvement project. Whether you're looking to add a backyard deck, upgrade the kitchen or redo a bathroom, home improvement costs can quickly add up.

By taking out a personal loan, you get the funds you need to start or complete a project. Since many home improvement projects can increase the resale value of your house, this is an excellent way to put your loan money to use, especially if you know you'll sell in a few years.

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The perk of being able to say you're a homeowner can also be a downside, as you are responsible for the upkeep of the property and any unexpected repair costs that arise. If you're faced with a sudden repair need, a personal loan can ensure you're able to finance the task at hand.

Getting a Business off the Ground

From research expenses and professional business planning to advertising needs and employee expenses, startups can be costly. Don't let your dream of being a business owner slip through your fingers because you don't have the funds needed to get it off the ground, check out your personal loan options!

With a variety of lenders and competitive APRs, borrowers of every budget can find a personal loan that works for them. Thanks to the speedy application process when compared to that of a small business loan, many find that a personal loan is the easier route to go. Just be sure you're doing your research before deciding on a plan of action!

Making a Large Purchase

From furniture pieces and big appliances to a much-needed car, a personal loan can help you complete a major purchase. Consumers often find low APRs, making this type of loan more attractive than say, financing through a store or dealership.

Just keep in mind that you have a variety of options before you. Don't feel pressured to finance a large purchase through the company you're buying from, as they may not always offer you the best deal!

While a home is a large purchase, personal loans typically don't play a part in the process. Instead, you'll want to make sure you're getting a competitive mortgage rate.

Covering Wedding Expenses

The average cost of a wedding in 2019 was nearly $34,000, which doesn't include a honeymoon! This price tag begs the question: how do people afford weddings? The answer could be with assistance from a personal loan.

Invitations, food, alcohol, music, venue, flowers, not to mention the perfect wedding dress—it is expensive to get married. That being said, couples are willing to pay a little extra for their wedding must-haves, as it will be a day they'll remember forever. You don't have to settle when it comes to your nuptials, as a personal loan could help you bridge the gap between your finances and the wedding you've always wanted. Be sure to shop around so you can compare offers, as you want to be sure you and your significant other are setting yourselves up for success!

The Possibilities Are Endless

So, what can you use a personal loan for? As you can see, the possibilities are virtually endless. From helping you pay off bills and tackling home repairs to securing money for a business, major expense, or dream wedding, many people are taking advantage of the competitive rates personal loans have to offer. What will you use your loan for?