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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.

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Editor's choice: LendingClub personal loans

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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

Data indicated here is updated regularly
Name Product Filter Values APR Min. Credit Score Max. Loan Amount
Credible personal loans
4.99% to 35.99%
Fair to excellent credit
$100,000
Get personalized rates in minutes and then choose an offer from a selection of top online lenders.
Monevo personal loans
3.49% to 35.99%
None
$100,000
Quickly compare multiple online lenders with competitive rates depending on your credit.
Fiona personal loans
4.99% to 35.99%
Good
$100,000
Get loan offers from multiple lenders at once without affecting your credit score.
LendingTree personal loans
Starting from 2.49%
Good to excellent credit
$50,000
Receive up to five loan offers in just minutes through LendingTree's simple online form.
SoFi personal loans
5.99% to 18.28%
680
$100,000
A highly-rated lender with competitive rates, high loan amounts and no fees.
NetCredit personal loans
34% to 155%
No minimum
$10,500
Check eligibility in minutes and get a personalized quote without affecting your credit score.
LightStream personal loans
Varies
Good to excellent credit
$100,000
Borrow up to $100,000 with low rates and no fees.
Even Financial personal loans
4.99% to 35.99%
550
$100,000
Get connected to competitive loan offers instantly from top online consumer lenders.
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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
CitibankNoNoYesYesNoNo
DiscoverYesNoYesYesYesYes
LendingClubYesYesYesYesNoNo
NetCreditYesNoYesYesYesYes
OneMain FinancialYesNoYesYesYesYes
ProsperYesYesYesYesYesYes
SoFiNoNoYesYesYesNo
UpstartYesYesYesYesYesYes
USAAYesNoYesYesYesYes
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?

Bottom line

Because lenders don’t place many restrictions on the way borrowers can use a personal loan, you can use your funds for just about 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.

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