Finder may earn compensation from partners, but editorial opinions are our own. Advertiser Disclosure

What can you use a personal loan for?

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

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 consolidation

Yes

Many 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 bills

Yes

While 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 improvement

Yes

Not only can you use a personal loan for home improvement, you can also consider using your home equity to cover renovations.

Buying a car

Yes

Although 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 using your vehicle as collateral.

Pay off taxes

Yes

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.

Business

It depends

Lenders have different criteria for approving loans for business purposes, but you may still be able to get a personal loan for business use.

Vacation

Yes

There 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.

Wedding

Yes

You can certainly use a personal loan to finance your wedding. But like with vacations, it should be in combination with your savings to keep interest costs low.

Pet care

Yes

A personal loan can help you pay for unexpected pet ownership costs, such as large veterinary bills or even the deductible on your pet insurance.

Boat or jet ski

Yes

While you can use a personal loan to finance a boat or a 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 green

Yes

Many lenders are willing to help you foot the cost of becoming energy efficient by offering loans to buy solar panels and other equipment.

Compare top personal loan options

Name Product Filter Values APR Min. Credit Score Loan Amount
BHG personal loans
Varies
700
$20,000 – $200,000
A highly-rated lender with quick turnaround and reliable customer service.
Credible personal loans
2.49% to 35.99%
Fair to excellent credit
$600 – $100,000
Get personalized rates in minutes and then choose an offer from a selection of top online lenders.
Best Egg personal loans
5.99% to 29.99%
600
$2,000 – $50,000
A prime online lending platform with multiple repayment methods.
PenFed Credit Union personal loans
5.99% to 17.99%
650
$600 – $50,000
With over 80 years of lending experience, this credit union offers personal loans for a variety of expenses.
SoFi personal loans
4.99% to 19.63%
680
$5,000 – $100,000
A highly-rated lender with competitive rates, high loan amounts and no fees.
Monevo personal loans
1.99% to 35.99%
None
$500 – $100,000
Quickly compare multiple online lenders with competitive rates depending on your credit.
Tally+ Express
7.9% to 29.99%
660
$2,000 – $30,000

Only available for Line of Credit and Debt consolidation

Upgrade personal loans
5.94% to 35.97%
600
$1,000 – $50,000
Affordable loans with two simple repayment terms and no prepayment penalties.
Upstart personal loans
5.55% 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.
loading

Compare up to 4 providers

Will my loan purpose affect my application?

It may. Specific 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
No
No
Yes
Yes
No
No
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
Yes
No
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes

What other credit options do I have?

While a personal loan can be used several 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, 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?

Bottom line

Because lenders don’t place many restrictions on the way borrowers can use a personal loan, you can use your funds for almost anything. However, not everything should be financed.

You may be better off saving for that big purchase or vacation that taking out a loan. If possible, speak with a personal accountant to help guide your decision.

When you’re ready to borrow, compare your personal loan options to find the best deal for your budget.

Frequently asked questions

How can I get approved for a loan?

After you’ve decided on a lender, apply from finder.com by selecting the Go to Site button on the comparison table.

Follow the instructions on the lender’s website and be sure to review the eligibility criteria to make sure you qualify. There’s no guarantee that you’ll be approved, but you can follow these tips to improve your chances of being approved for a personal loan.

Why was my personal loan application rejected?

Many lenders will give you a reason for your rejection or allow you to request this information. Otherwise, it can be difficult to determine why your application was rejected. Review the eligibility criteria closely before submitting further personal loan applications.

How can I borrow money if I have bad credit?

When you have bad credit, your options for personal loans may be limited. And while there are personal loans for bad credit, you may not be able to borrow as much as you need to fund your specific purpose.

More guides on Finder

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and finder.com Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site