22 Ways to Use a Personal Loan (Including Some You’ve Never Thought Of)

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Personal loans are a wonderful resource if you know how to use them. Often, you might not be sure why you would need one. But you should know how helpful — or hurtful — personal loans can be.

If you’re curious about all the reasons people might take out a personal loan, here’s a wide-ranging list — including some reasons you’ve never thought about. We’ve also included our recommendation on how good an idea it is to borrow money for that purpose.

1. Credit card consolidation

Often a good idea: Personal loans could lower your minimum credit card payments and reduce your overall credit card debt. Credit cards tend to have high interest rates, which makes paying them off take longer.


  • You can pay off your high-interest credit card debt faster.

  • You can make one simplified payment.


  • A lower credit card balance might entice you to use your credit more.

2. Debt consolidation

Sometimes a good idea: If you’re having trouble managing all your debt with various interest rates, personal loans might be able to streamline the process and cut your interest rate.



3. Student loan repayment

Generally not a good idea: You can get a personal loan to replace your current student loan debt. Consolidation might make it easier to have one big payment, but there are some pretty big cons here, especially when compared to refinancing.


  • Having one personal loan payment is easier than having many.

  • Consolidating to a personal loan releases your cosigner, if you have one.


  • Shorter repayment terms than student loans mean a larger monthly payment.

  • Interest isn’t tax-deductible as it is on student loans.

  • Some lenders don’t allow personal loans to pay off student loans.

4. Paying for school

Rarely a good idea: After federal student loans and private student loans, personal loans could fund gaps in financing your education, but this isn’t always allowed.


  • Personal loans have more freedoms than federal loans, so you can use them however you’d like.


  • Personal loans typically charge higher interest rates than federal student loans.

  • Shorter repayment terms than federal loans mean a larger monthly payment.

  • Some lenders don’t allow personal loans to be used for higher education.

5. Medical expenses

Sometimes a good idea: If your medical bills are overdue and might make your credit score drop, you could use a personal loan to pay them off.


  • Avoid sending your overdue medical bills into collections with a personal loan.

  • You can pay for medical expenses or procedures before they happen.


  • You limit your choices since a hospital or medical billing company might offer the option to pay your bills without interest.

  • You can negotiate medical debt down, but you can’t talk down the cost of a personal loan.

6. Miscellaneous bills

Sometimes a good idea: Inconsistent income might mean you’re paying rent and other bills late. A personal loan or line of credit could give you a bit more regularity.


  • A loan could steady your cash flow because of unemployment, underemployment, or unreliable employment.

  • You can use personal loans for nearly anything, including rent or bills that are paid monthly.


  • If you become too reliant on personal loans, you’ll never catch up on your payments.

  • Regardless of your interest rates, you’ll always pay more than the cost of the original bill.

7. Home repairs and improvements

Rarely a good idea: If you’re having trouble affording remodeling, repairs, or improvements on your home, a personal loan can give you the money you need. That said, you might be better saving this option only for truly necessary repairs.


  • Personal loans are a helpful financial tool if you’re in a pinch.

  • If a project cost more than you anticipated, personal loans can cover things for which you didn’t account.


  • Home improvement loans tend to have high interest rates.

  • Shorter repayment terms mean high monthly payments that you might not be able to afford.

8. Moving expenses

Sometimes a good idea: Have you taken a job across the country and need some extra cash fast? Personal loans might work for you.



  • High interest rates and short repayment terms mean holding onto a lot of debt while trying to adapt to a new city.

  • If a new salary won’t help you make payments on your new debt, you might end up with more debt and stress.

9. Weddings

Rarely a good idea: Your wedding is one of the most expensive days of your life, which means if you don’t have the cash to pay for it yourself, you might need a wedding loan.


  • Interest rates are usually better for personal loans than credit cards.

  • You can take out a higher amount in a personal loan than what you can charge to a credit card, giving you a bit more freedom to make your dream day come true.


  • You’ll start your marriage in debt (or in more debt), which can put stress on your new union.

  • A high debt-to-income ratio will hurt your credit score and ultimately any new credit you try to establish.

10. Major home purchases

Rarely a good idea: You might want to splurge on a new bed or redecorate your living room. Having a personal loan gives you more options to get what you want rather than what your bank account allows, but it comes at a heavy price.


  • Personal loans can help if you need something immediately, such as a mattress or computer, that you can repay over a few months.


  • Small personal loans tend to have high interest, which means you can pay hundreds more than the original price of what you’re buying.

11. Buying a car

Rarely a good idea: If you need your car to get to work and can’t find other financing, getting a personal loan to afford a new one might be necessary.


  • If you couldn’t get a dealership or bank loan, a personal loan can help supply the funds you need for a new car.

  • Typically lax restrictions will allow you to use personal loans for anything, including getting a new car or refinancing your current loan.


  • Personal loans have higher interest rates than car loans, making larger monthly payments for you.

  • With your car depreciating, you might end up paying double what the car is actually worth in the long run.

12. Vacations

Rarely a good idea: Looking to get away and can’t afford everything you want? A personal loan could fill in any vacation financing gaps, but the debt will linger long after the trip is over.


  • Taking out a personal loan will save you from the higher interest on credit cards.

  • You can take a vacation now instead of saving up for one.


  • You’ll be paying interest on your vacation.

  • Your vacation will put you in debt, rather than saving for one that keeps you debt-free.

13. Starting a business

Sometimes a good idea: If you’re just starting your business, a personal loan can help you with unexpected expenses.


  • If you don’t have a business credit card, personal loans with low interest rates can give you the capital you need to get off the ground.

  • If your business is successful, you’ll be able to pay off your loan quickly.


  • You still need to pay back your loan regardless of the success of your business. If it fails, you still owe money.

  • Missing payments could negatively impact your credit score.

14. IVF and other treatments

Sometimes a good idea: Having a baby is expensive no matter how you have one. If you’re struggling to conceive, a personal loan can help you afford in vitro fertilization or other fertility treatments.


  • A low-rate loan can help you afford infertility treatments right now, which is important if you’ve been having trouble conceiving.

  • A personal loan can help cover expensive costs since health insurance might not cover treatments.


  • Even if nothing comes of IVF or other fertility treatments, you’re still obligated to pay back your loan.

15. Emergencies

Generally not a good idea (if you have a choice): After bills and debt, saving for an emergency can be far down the priority list. A personal loan can save you in a pickle.


  • If you need money fast, a personal loan can be a lifeline.

  • In case of a disaster, personal loans are available to cover costs for which you don’t have the cash.


  • Payday loans tend to have very high interest loans with difficult repayment terms.

  • High-interest loans can put you further into debt, keeping you from saving for any future emergency and possibly putting you behind on other bills.

16. Taxes

Rarely a good idea: If you owe money to the IRS, getting a personal loan can get you out of debt with the government but often at a higher price.


  • If you can find a lower interest rate than what the IRS charges, getting a personal loan to pay off what you owe to the government can save you money.


  • Personal loans usually have higher interest rates than payment plans with the IRS, so you’ll end up paying more in the long run.

17. Funeral costs

Sometimes a good idea: Covering the cost of a funeral can get expensive, so you’ll definitely want to look for a low rate.



  • If you have a high-interest personal loan, your monthly payments could be too much to afford.

  • Even with low monthly payments, you might be paying back the loan for a long time after the funeral, adding more interest to the original amount.

18. Adoption

Sometimes a good idea: Like IVF, personal loans can help you cover the costs associated with having a child.


  • Adoption is expensive and personal loans can cover any gaps.


  • You’ll be paying back a loan while also trying to afford basic needs for a child, which could put you further into debt.

19. Pet expenses

Sometimes a good idea: Pets can be expensive, especially if an emergency pops up.


  • If you don’t have pet insurance, a personal loan is a good way to cover costs you might not be able to afford otherwise.

  • Personal loans can help you save your pet so that you don’t have to put finances above your pet’s life.


  • Veterinary bills can be high, which can give you mountains of debt regardless of the outcome of care.

  • Interest rates are high for personal loans, so you’re paying even more with that added cost.

20. Boats or personal watercraft

Generally not a good idea: If you’re looking to splurge, a personal loan will get you your new toy, but regret could follow.


  • You’ll be able to buy a boat or personal watercraft faster if you have a personal loan.


  • Because boats and personal watercraft depreciate quickly, you’ll be paying much more over the life of the loan.
  • The interest on a personal loan could make the total cost of your new toy much more than it’s worth.

21. Private school costs

Rarely a good idea: Sometimes the best schools come at a cost. Paying for your child’s education might mean tapping into other resources if financial aid isn’t available.


  • A personal loan can ensure your child goes to their (or your) private school of choice.
  • If your choice is between public and private school, a personal loan gives your child the opportunity to attend the more expensive private school.


  • You could end up paying thousands of dollars before your child even graduates high school.
  • High interest rates mean you’ll be footing the bill for much more than the original cost of school.

22. Weight-loss surgery

Sometimes a good idea: Whether you have serious health issues or you’re interested in weight-loss surgery for other reasons, you’ll need to be able to cover the costs.


  • If your concern is being able to afford surgery, a personal loan can ensure you’ll be able to pay for the costs soon after the procedure.
  • A personal loan can give you the funds you need if the surgery is life-threatening or preventive.


  • Any major surgery is going to be expensive, but a personal loan will only add to that cost with high interest rates.
  • Depending on your repayment terms, you might have to pay back your personal loan in less time than you’ll be able to afford. It might not be best if you’re not working due to recovery.

Personal loans have a variety of uses

No matter how you choose to use a personal loan, you’ve got many options. You might find that a personal loan is a great option for you. But it’s OK if you find something better to fit your needs.

Make sure to explore all the conditions and repayment terms before taking one out. If you find low- or zero-interest credit cards or have the chance to save up for emergencies before they happen, these are better options than a high-interest personal loan.

Do your best to review your choices thoroughly before making any decisions.

Interested in a personal loan?

Here are the top personal loan lenders of 2019!
LenderAPR RangeLoan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Fixed rates from 5.990% APR to 16.240% APR (with AutoPay). Variable rates from 5.75% APR to 14.60% APR (with AutoPay). SoFi rate ranges are current as of March 18, 2019 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 5.75% APR assumes current 1-month LIBOR rate of 2.50% plus 4.28% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
  2. To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.
    See Consumer Licenses.
  3. Minimum Credit Score: Not all applicants who meet SoFi’s minimum credit score requirements are approved for a personal loan. In addition to meeting SoFi’s minimum eligibility criteria, applicants must also meet other credit and underwriting requirements to qualify.
  4. SoFi Personal Loans are not available to residents of MS. Maximum interest rate on loans for residents of AK and WY is 9.99% APR, for residents of IL with loans over $40,000 is 8.99% APR, for residents of TX is 9.99% APR on terms greater than 5 years, for residents of CO, CT, HI, VA, SC is 11.99% APR, and for residents of ME is 12.24% APR. Personal loans not available to residents of MI who already have a student loan with SoFi. Personal Loans minimum loan amount is $5,000. Residents of AZ, MA, and NH have a minimum loan amount of $10,001. Residents of KY have a minimum loan amount of $15,001. Residents of PA have a minimum loan amount of $25,001. Variable rates not available to residents of AK, TX, VA, WY, or for residents of IL for loans greater than $40,000.
  5. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2 Includes AutoPay discount. Important Disclosures for Payoff.

Payoff Disclosures

  1. All loans are subject to credit review and approval. Your actual rate depends upon credit score, loan amount, loan term, credit usage and history. Currently loans are not offered in: MA, MS, NE, NV, OH, and WV.

3 Important Disclosures for FreedomPlus.

FreedomPlus Disclosures

  1. All loans available through FreedomPlus.com are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Eligibility for a loan is not guaranteed. Loans are not available to residents of all states – please call a FreedomPlus representative for further details. The following limitations, in addition to others, shall apply: FreedomPlus does not arrange loans in: (i) Arizona under $10,500; (ii) Massachusetts under $6,500, (iii) Ohio under $5,500, and (iv) Georgia under $3,500. Repayment periods range from 24 to 60 months. The range of APRs on loans made available through FreedomPlus is 5.99% to a maximum of 29.99%. APR. The APR calculation includes all applicable fees, including the loan origination fee. For Example, a four year $20,000 loan with an interest rate of 15.49% and corresponding APR of 18.34% would have an estimated monthly payment of $561.60 and a total cost payable of $7,948.13. To qualify for a 5.99% APR loan, a borrower will need excellent credit on a loan for an amount less than $12,000.00, and with a term equal to 24 months. Adding a co-borrower with sufficient income; using at least eighty-five percent (85%) of the loan proceeds to directly pay off qualifying existing debt; or showing proof of sufficient retirement savings, could help you also qualify for the lowest rate available.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate DisclosureFixed interest rates from 6.79% – 20.89% (6.79% – 20.89% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

5 Important Disclosures for LendingPoint.

LendingPoint Disclosures

  • Loan approval is not guaranteed. Actual loan offers and loan amounts, terms and annual percentage rates (“APR”) may vary based upon LendingPoint’s proprietary scoring and underwriting system’s review of your credit, financial condition, other factors, and supporting documents or information you provide. Origination or other fees from 0% to 6% may apply depending upon your state of residence. Upon LendingPoint’s final underwriting approval to fund a loan, said funds are often sent via ACH the next non-holiday business day. LendingPoint makes loan offers from $2,000 to $25,000, at rates ranging from a low of 9.99% APR to a high of 35.99% APR, with terms from 24 to 48 months. The loan offer(s) shown reflect a 28 day payment cycle which is being offered as a courtesy as many of our customers are paid on a biweekly schedule and thus this may better align the loan payment dates with your actual income receipt schedule.

6 Important Disclosures for LendingClub.

LendingClub Disclosures

All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.95% to 35.89%*. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 94105.

†Per reviews collected and authenticated by Bazaarvoice in compliance with the Bazaarvoice Authentication Requirements, supported by anti-fraud technology and human analysis. All reviews can be reviewed at reviews.lendingclub.com

**Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between January 1, 2018 to July 20,2018. The time it will take to fund your loan may vary.

7 Important Disclosures for Earnest.

Earnest Disclosures

  1. Earnest does not lend in Alabama, Delaware, Kentucky, Nevada, or Rhode Island.

8 Important Disclosures for Avant.

Avant Disclosures

* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.

** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33

* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

* Your loan terms are not guaranteed and are subject to our verification and review process. You may be asked to provide additional documents to enable us to verify your income and your identity. This rate includes an Autopay APR reduction of 0.5%. By enrolling in Autopay your payments will be automatically deducted from you bank account. Selecting Autopay is optional. Annual Percentage Rate is inclusive of a loan origination fee, which is deducted from the loan proceeds. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. All loans made by WebBank, member FDIC. Please refer to Upgrade’s Terms of Use and Borrower Agreement for all terms, conditions and requirements.

** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.

5.75% – 16.24%1$5,000 - $100,000

Visit SoFi

7.46% – 35.99%$1,000 - $50,000

Visit Upstart

7.99% – 35.89%*$1,000 - $50,000

Visit Upgrade

5.99% – 24.99%2$5,000 - $35,000

Visit Payoff

5.99% – 29.99%3$7,500 - $40,000

Visit FreedomPlus

6.79% – 20.89%4$5,000 - $50,000

Visit Citizens

9.99% – 35.99%5$2,000 - $25,000

Visit LendingPoint

6.95% – 35.89%6$1,000 - $40,000

Visit LendingClub

6.99% – 18.24%7$5,000 - $75,000

Visit Earnest

9.95% – 35.99%8$2,000 - $35,000

Visit Avant

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

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