List of 15+ personal loan uses | How to compare your options

What can you use a personal loan for?

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Learn about top ways to use a personal loan and how to compare your options.

There are multiple ways to borrow money, and personal loans could be an option to explore. So, in which situations should you consider a personal loan and when should you consider alternatives? Find out in this guide.

Prosper Personal Loans

Prosper

You could borrow up to $40,000 for a variety of purposes, with rates starting from 6.95%.

  • Recommended Credit Score: 640 or higher
  • Minimum Loan Amount: $2,000
  • Maximum Loan Amount: 40000
  • Loan Term: 3 or 5 years
  • Turnaround Time: 1-3 business days
  • Simple online application process
  • No prepayment penalties

    How can I use a personal loan?

    Generally, you can use a personal loan to cover a large one-time expense like home improvements or a wedding. Debt consolidation, or taking out a personal loan to pay off credit card debt and other loans, is also a common way to use a personal loan. That’s because personal loans typically have lower interest rates than credit cards.

    Let’s take a look at some of the top ways people use their personal loans.

    PurposeCan you fund this with a personal loan?What to consider
    Buying a carYesIf the vehicle is eligible, you can get a car loan for lower rates. Unsecured personal loans are also an option.
    Debt consolidationYesYou can get a debt consolidation personal loan or consider a balance transfer credit card.
    Home improvementYesAs well as a personal loan for home improvement, you can also consider a line of credit on your home, which is called a HELOC.
    Medical billsYesWhile your doctor or hospital might offer financing directly, you might be able to find a better deal by looking for a standard-use personal loan
    VacationYesThere are lenders that will you give you an unsecured personal loan to pay for a vacation.
    WeddingYesSome lenders will lend you money to finance the cost of your wedding.
    Pet careYesA personal loan can help you pay for unexpected costs that come with being a pet owner like veterinary bills.
    Boat or jet skiYesLenders impose maximum loan amounts that might not cover the total cost of your boat or jet ski. You may have the option of using the boat or jet ski you purchase as collateral for a secured loan.
    Pay off taxesYesYou can take out a loan to pay your tax bill in one lump sum to avoid fees charged by the IRS for installment payments or late payments.
    Going greenYesMany lenders are willing to help you foot the cost of becoming energy efficient by offering loans you can use to buy solar panels and more.
    BusinessIt dependsLenders have different criteria for approving loans for business purposes. Learn more about getting a personal loan for business use or check out our guide on business loans.

    What’s the difference between a secured and unsecured personal loan?

    How top lenders let borrowers use their personal loan

    ProviderAuto financing & refinancingBusiness expansionDebt consolidationHome improvementSpecial occasion & weddingVacation
    CitibankNoNoYesYesNoNo
    DiscoverYesNoYesYesYesYes
    LendingClubYesYesYesYesNoNo
    NetCreditYesNoYesYesYesYes
    OneMain FinancialYesNoYesYesYesYes
    ProsperYesYesYesYesYesYes
    SoFiNoNoYesYesYesNo
    UpstartYesYesYesYesYesYes
    USAAYesNoYesYesYesYes
    Wells FargoYesNoYesYesYesYes
    Upgrade Personal Loans*

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    Affordable loans with two simple repayment terms and no prepayment penalties.

    • Min Credit Score: 620 or higher
    • Min Loan Amount: $1,000
    • Max Loan Amount: $50,000
    • Loan Term: 36 months or 60 months
    • Not available in CT, CO, IA, MA, MD, VT or WV

      Will my loan purpose affect my application?

      How you use your loan can affect your application. For example, if you’re applying for debt consolidation, you may already appear to be higher risk than someone who’s buying an asset, such as a car, or someone who’s investing in their property by making renovations.

      However, it depends on how the lender assesses your application’s risk. Ultimately, your eligibility will come down to whether you meet the lender’s application criteria and whether you can afford the loan.
      7 tips to improve your chances of approval for a personal loan

      Personal loans you can apply for today

      Rates last updated July 16th, 2018

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      Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
      Name Product Product Description Min. Credit Score Max. Loan Amount APR
      Even Financial Personal Loans
      Get connected to competitive loan offers instantly from top online consumer lenders.
      580
      $100,000
      4.99%–35.99% (fixed)
      LendingClub Personal Loan
      A peer-to-peer lender offering fair rates based on your credit score.
      660
      $40,000
      6.16%–35.89% (fixed)
      Upgrade Personal Loans*
      Affordable loans with two simple repayment terms and no prepayment penalties.
      620
      $50,000
      6.87%–35.97% (fixed)
      SoFi Personal Loan Fixed Rate (with Autopay)
      No fees. Multiple member perks such as community events and career coaching.
      680
      $100,000
      6.325%–15.615% (fixed)
      Credible Personal Loans
      Get personalized rates in minutes and then choose a loan offer from several top online lenders.
      Good to excellent credit
      $50,000
      4.99%–36% (fixed)
      Best Egg Personal Loans
      A prime lender with multiple repayment methods.
      640 FICO®
      $35,000
      5.99%–29.99% (fixed)
      Prosper Personal Loans
      Borrow only what you need for debt consolidation, home improvements and more — with APRs based on overall creditworthiness.
      640
      $40,000
      6.95%–35.99% (fixed)
      FreedomPlus Personal Loans
      Consolidate debt and more with these low-interest loans. Cosigners welcome.
      640
      $35,000
      4.99%–29.99% (fixed)
      NetCredit Personal Loan
      Check eligibility in minutes and get a personalized quote without affecting your credit score.
      550
      $10,000
      34%–155% (Varies by state) (fixed)
      OneMain Financial Personal and Auto Loans
      An established online and in-store lender with quick turnaround times. Poor credit is OK.
      Varies
      $30,000
      16.05%–35.99%* (fixed)
      Monevo Personal Loans
      Quickly compare multiple online lenders with competitive rates depending on your credit score.
      580
      $100,000
      3.09%–35.99% (fixed)

      Compare up to 4 providers

      What other credit options do I have to consider?

      While a personal loan is a viable option for the above scenarios, you also have other financing options to consider. These include:

      • Home equity loans. If you’re undertaking home renovations, using the equity from your home can also be an option. Work out the costs of this as well as a personal loan to see which one would be a better option.
      • Business loans. If you require a large loan for business purposes, you can compare business lenders offering financing up to $5,000,000.
      • Credit cards. These can be a good source of ongoing credit and can come with high limits – between $1,000 and $100,000 – that you can use when you don’t have the ready money.
      • Balance transfer credit card. If you have debt across a few credit cards or even a few personal loans, you can consider a balance transfer credit card. These let you pay 0% interest on the debt for an extended period of time.

      When should I not use a personal loan?

      While many loan purposes are acceptable, some aren’t always advised. Here are some situations where you may want to reconsider your loan application:

      • If you can easily save the money. Want to buy a luxury item or treat yourself to a splurge purchase, but it isn’t urgent? A personal loan may not be the best option. One idea is to work out how much your repayments would be and save that amount each month instead.
      • If it’s a bad investment. Are you thinking of taking out a loan to make home improvements or some other investment? Make sure the investment will add value, otherwise you’ll be repaying your loan on an idea that lost money.
      • If your income and employment aren’t stable. Taking out a personal loan when you’re in an unstable financial situation could hurt you in the long run. If there’s any reason why you think your income or employment situation might change for the worse, consider alternatives like cutting back on expenses or saving money in a savings account.

      How to compare personal loans

      Here are a list of features to compare when considering personal loan options:

      • Loan amount. Check what the minimum and maximum borrowing amounts are and if they meet your needs.
      • Loan terms. Some lenders offer shorter loan terms than others. This affects the monthly repayment amount.
      • Upfront and ongoing fees. These fees will be added onto your principal loan amount and will therefore affect your repayments and the interest you have to pay.
      • Type of interest rate. Your loan can either be fixed or variable, and both of these rates will come with different features.
      • APR. The Annual Percentage Rate incorporates the fees as well as the interest rate to show you the true cost of the loan.
      • Repayment flexibility. Check whether you’ll be able to make additional repayments or pay off the entire loan amount early without penalty.

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      US Personal Loans Offers

      Important Information*
      Even Financial Personal Loans

      Get connected to competitive loan offers instantly from top online consumer lenders.

      Prosper Personal Loans

      Borrow only what you need for debt consolidation, home improvements and more — with APRs based on overall creditworthiness.

      LendingClub Personal Loan

      A peer-to-peer lender offering fair rates based on your credit score.

      SoFi Personal Loan Fixed Rate (with Autopay)

      No fees. Multiple member perks such as community events and career coaching.

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