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What can you use a personal loan for?

Not sure how you can use your loan funds? Here are your top options.

Editor's choice: PenFed Credit Union personal loans

  • Competitive rates as low as 6.49%
  • No hidden fees
  • Loans up to $35,000
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When you need to borrow money, there are plenty of choices to choose from. If you’ve started looking at personal loans, you may be wondering what sort of situations you can use one for and what you can do to find the best lender for your situation. By breaking down your options, you can make your decision easier and know that your loan will be useful for whatever purpose you need to pay for.

How can I use a personal loan?

Lenders rarely place restrictions on how you can use the funds from your personal loan. This is by no means an exhaustive list, but it can get you started when you have large expenses you need covered.

PurposeCan you use a personal loan?What to consider
Debt consolidationYesMany people take out personal loans for debt consolidation. It’s a top option because you can potentially lower your monthly payments or score a lower interest rate. However, it’s not guaranteed to be a better deal. You’ll still have to compare your options to find the best debt consolidation loan.
Medical billsYesWhile your doctor or hospital might offer its own financing, you might be able to find a better deal by comparing your medical loan options or by looking for a general-use personal loan.
Home improvementYesNot only can you use a personal loan for home improvement, you can also consider using your home’s equity to pay for renovations.
Buying a carYesAlthough you can use a personal loan to cover the cost of a vehicle — especially if it’s a vintage model — you may be able to score a lower rate by opting for a car loan that uses your vehicle as collateral.
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 plans or late payments.
BusinessIt dependsLenders have different criteria for approving loans for business purposes, but you may still be able to get a personal loan for business use.
VacationYesThere are lenders that offer personal loans for vacations. However, it’s best to know your budget and only borrow as much as you need before jetsetting around the globe.
WeddingYesYou can certainly use a personal loan to finance your wedding. But like with vacations, it should be in combination with your savings to keep the cost of interest low.
Pet careYesA personal loan can help you pay for unexpected costs that come with being a pet owner, such as large veterinary bills or even the deductible on your pet insurance.
Boat or jet skiYesWhile you can use a personal loan to finance a boat or jet ski, you may not be able to cover the full cost. If you can’t borrow the maximum amount with an unsecured loan, consider borrowing a secured loan for your boat or jet ski.
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 other equipment.

Compare top personal loan options

Name Product Filter Values APR Min. Credit Score Loan Amount
Best Egg personal loans
5.99% to 29.99%
$2,000 - $50,000
A prime online lending platform with multiple repayment methods.
SoFi personal loans
5.99% to 18.85%
$5,000 - $100,000
A highly-rated lender with competitive rates, high loan amounts and no fees.
Upgrade personal loans
5.94% to 35.97%
$1,000 - $50,000
Affordable loans with two simple repayment terms and no prepayment penalties.
Credible personal loans
2.49% to 35.99%
Fair to excellent credit
$1,000 - $100,000
Get personalized rates in minutes and then choose an offer from a selection of top online lenders.
Upstart personal loans
7.68% to 35.99%
580 or 600 depending on state of residence
$1,000 - $50,000
This service looks beyond your credit score to get you a competitive-rate personal loan.
LendingClub personal loans
8.05% to 35.89%
$1,000 - $40,000
A peer-to-peer lender offering fair rates based on your credit score.
LendingPoint personal loans
9.99% to 35.99%
$2,000 - $36,500
Get a personal loan with reasonable rates even if you have a fair credit score in the 600s.
OneMain Financial personal loans
18% to 35.99%
$1,500 - $20,000
An established online and in-store lender with quick turnaround times. Poor credit is OK.
Monevo personal loans
1.99% to 35.99%
$500 - $100,000
Quickly compare multiple online lenders with competitive rates depending on your credit.

Compare up to 4 providers

Will my loan purpose affect my application?

It may. Certain loan purposes may be seen as more risky than others. For example, if you’re applying for debt consolidation, you may already appear to be higher risk than someone who’s buying an asset like a car.

However, being approved for a loan will depend more on how the lender assesses your risk than what you plan on using your loan for. Ultimately, your eligibility will come down to whether you meet the lender’s eligibility criteria and if you can afford the amount you’re looking to borrow.

How top lenders let borrowers use their personal loan

ProviderAuto financing & refinancingBusiness expansionDebt consolidationHome improvementSpecial occasions & weddingVacation
OneMain FinancialYesNoYesYesYesYes
Wells FargoYesNoYesYesYesYes

What other credit options do I have?

While a personal loan can be used a number of ways, you also have other financing options to consider.

  • Home equity loans. If you’re undertaking home renovations, using the equity from your home may be an option. Since you’re using your home’s equity as collateral, you may be eligible for a lower interest rate.
  • Business loans. If you need a large loan for business purposes, you can compare business lenders offering financing up to $5 million.
  • 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 savings to make a purchase. However, many tend to have higher interest rates than personal loans.
  • Balance transfer credit card. If you have debt across a few credit cards or even a few personal loans, you may want to consider a balance transfer credit card. These let you pay 0% interest on the debt for an extended period of time.

What would you like to finance?