23 Best and Smart Ways to Use a Personal Loan
There are some really smart ways to use a personal loan. Today we are going to list 23 best ways to use a personal loan.
First we want to mention that we are talking about online unsecured personal loans. Usually if you have good credit you can take advantage of lower interest rates. They can also not only be a smarter way to pay for something than using your credit cards, but have a fixed length of time. This means that they are paid off after a fixed amount of payments. This is unlike a credit card where you try to pay, but the revolving credit can extend payments and balances for years.
This is why sometimes using personal loans are a better idea. OK, lets get into the ways to use a personal loan.
1. Credit Card and Debt Consolidation
Accumulating balances on credit cards can be easy to do. All you need is to have a couple big things happen and you get behind. You are paying mainly interest charges when you send in your payments. Maybe you try to do a balance transfer and then start using the other card again. Now you have multiple high interest credit cards.
When you have multiple high interest credit cards and other obligations, a debt consolidation personal loan might make sense. The unsecured personal loan can pay off all the other debts and consolidate them into just one fixed payment that has an end date. Depending on your credit score you could also reduce the interest rates overall.
You may also find that by going to just one fixed payment loan that you will free up cash flow each month. It is also much simpler to manage just one loan vs multiple credit cards and loans.
2. Home Improvement Projects
When we are homeowners there is a never ending list of projects that we need to do to update and maintain a home. Bathroom and Kitchen renovations can also add value to the home if you are thinking of selling. Even if you are not thinking of selling you may just want to update that old kitchen and bath to something more modern and beautiful.
A kitchen remodel can cost a few thousand dollars. You can get personal loans up to $40,000 depending on your credit score and history, so normally it will cover this type of expense.
3. Use During a Disaster or Emergencies
We have seen the effects of floods, tornadoes and hurricanes over the past few years. These repairs can be frustrating and sometimes insurance does not cover everything. When you are in this type of situation and have good credit, an unsecured personal loan can really help get things back to normal. Even if it is to fix damaged walls or to put a new roof on it is a viable way to get the money you need.
4. Medical Expenses
Doctor or hospital bills can add up quickly if you fall ill. Insurance deductibles are high and many times you may have to pay out of pocket or installment payments. This situation could be a reason to get a personal loan to take care of these types of bills. It is a personal decision, but can be a source of funds when you need it.
5. Buying a New Car
Most people don’t plan ahead when they walk into a car dealership. Even when buying from a private owner, cash gives you an advantage when negotiating. When looking to buy a new or used car, you can preplan by taking out an unsecured personal loan ahead of the purchase.
Online personal loans, if approved are directly deposited into your checking account. Now you have the cash to negotiate with. There is nothing more frustrating than buying a car and having the dealers finance department work through numbers and rates that can be confusing. Getting the money up front through a personal loan can be a smart idea.
6. Paying For College Expenses
Student loans can be a way to pay for your college tuition. Federal and private loans are usually a lower interest rate that personal loans and for longer terms. The main advantage of an unsecured online personal loan is that it is for a shorter duration. Federal and private student loan debt is unforgivable. This means even if you claimed bankruptcy you still have to pay them.
If you take out a unsecured personal loan it can also help to pay for books and other expenses in combination with other funding sources including student loans.
This is something you will want to think through carefully on the strategies you want to use to pay for you college expenses. An online personal loan can be an option to help raise the money you need. You could even work part time to pay the payments so it is paid off when you graduate.
7. Down Payment on a House
Most people would not think of taking out a personal loan to use for a down payment on a home. It can be done though if used in a smart way. Now of course when you are getting approved for the loan they will take it in consideration. But, if you are a first time home buyer and can get an FHA loan, usually the down payment can be as low as 3.5%. Then you have closing costs. If you take out a small personal loan it could cover these expenses and get you into a home. This is just a strategy you could check out and research on your own.
8. Moving Expenses
When moving from city to city or state to state, relocating can be expensive. The idea would be that you can have a professional moving company move you can the financing would come from a personal loan.
9. Home Repair
An air conditioner or roof can set you back a few thousand dollars. You may also need to resurface your built in pool or replace plumbing in your home. These are things where you may not have saved enough in an emergency fund to cover. This is where personal loans could fill that gap.
10, Buying an RV
Now buying an RV can be a cool way to travel the country. Financing on one of these beauties can be expensive. A personal loan could help finance part or all of a RV purchase depending if you are buying new or used.
11. Landscaping Your Home
Having an awesome landscape around your home can add a lot of pleasure. If you have wanted to beautify you backyard and maybe even add a spa and fire pit for some ambiance, this is a way to finance the project.
12. Auto Repair
Most cars these days are fairly high quality. The problem is you never know when you will get hit with a major repair. This could include the main computer going out or your air conditioner. You may love your car and not want a new one. Investing some money into auto repairs vs buying new could be a smart idea.
A small personal loan could help with these repairs and get your car back into great condition. This can help you maintain it and keep it running for years.
13. New Business Start Up Costs
Many times it can be really tough to find new startup money for a business venture. You might have a great idea or invention you want to develop. Maybe you want to open a restaurant or buy into a franchise. When you are having trouble finding the money to meet the goal, a personal loan could help raise money for this sort of thing.
Most people think of a business loan, but if you have great credit it could meet your needs.
14. Converting Your House to Solar
If you have dreamed of getting rid of your electric bill and going off the grid using solar power it can be expensive. The expense comes with buying all the panels and equipment up front. A personal loan could finance the project and you can use some of the savings to pay it off. Just an idea.
15. Wedding Expenses
Weddings seem to just keep getting more expensive. By the time you buy the dress, put a deposit down on a banquet hall and order you cake it can really add up. Paying for the majority of these expenses with a personal loan can be the best way to pay for a wedding.
It all going back into pre planning. Figure all the expenses ahead of time on a spreadsheet or piece of paper. Look at how you can budget or reduce the cost in any way, then add up the total. You can then finance it with a personal loan and even be making the payments while getting ready for the wedding.
This could allow you to have a percentage of it paid off before you get married. You will have a beautiful wedding but know when the fixed payments on your personal loan are done, you are debt free.
16. Buying a Pool For The BackYard
If you live in a hot state like Florida, Nevada or Arizona you will usually have a built in pool in the backyard. This is also nice when you have younger children who love to swim with their friends. The idea of having a pool installed or setup in your back yard can be a few thousand dollars. This is just another way a personal loan could come in handy.
17. Paying for a Funeral
This is one of those expenses nobody wants to think about. When a loved one passes many do not realize how expensive a nice funeral can be. Many have life insurance to cover it. But, if you find out that you or your siblings have to pick up the cost, a personal loan could be one way.
18. Large Vet Bills
I have known a few people who have had dogs they absolutely love get sick. This required either an expensive operation or procedure that ran into the thousands of dollars. They did not have pet insurance to cover it and put it on a credit card with a high interest rate.
The situation happens all the time and a smarter way would be to get a personal loan. At least you have a fixed timeframe to pay it off and it is not going to carry a balance forever like a credit card. This is a personal decision, but think it is one of the best ways to to use a personal loan.
19. Paying For Your Honeymoon
A friend of mine is getting married and then they are going on a honeymoon to Singapore and then on to a exotic island. They have been together for a few years and do not really want presents for there wedding. They are asking for donations towards this exotic honeymoon. It can be a trip you will always remember and a personal loan could fill the gap for whatever isn’t covered by donations.
20. Buying a Boat
Some people love to boat throughout the summer or even live on their vessel. If you are looking to buy a boat, but need some financing, this can be a good way to fund it.
Pontoon boats have become extremely popular and are around $30,000. If you have good credit you could get a personal loan to finance your boat purchase.
It can be a great way to have fun with the entire family. If you live on your boat and it qualifies as a second home it might actually be take deductible. But check with your financial advisor or CPA first.
21. Flipping a House or Other Real Estate Investments
Today there is a craze going on with real estate investors. Many are just young guys and gals who are finding fixer uppers to flip. Sometimes you can get private money loans or other hard loans as they are called. Sometimes these can be at a fairly high interest rate. Another way to possibly cover the repairs at least would be to use a personal loan.
It is unsecured and a fairly fast way to raise the money you will need.
22. Major Electronics Purchases
When you need an new appliance or maybe you are buying a new HGTV and equipment for a theatre room. Utilizing a personal loan for a project is a way to finance it.
23. Paying for a Detached Garage or Metal Building
When you have a classic car, boat or RV, you may need a good permanent place to store it. If you have the land and want to build a detached garage or even buy a metal building and have it installed this can be a way to finance it.
There are so many ways to utilize unsecured personal loans. You will also find that applying online for these through various lending platforms is quick and easy.
Peer-to-peer personal loans are a great way to get the money you need. Their lending platform allows you to fill out one form and then get funded by individual investors. The process can be done completely online and you can get a personal loan for up to $40,000. You can just visit LendingClub.com
Another option for an online personal loan is to use a lending network. We recommend PersonalLoans.com
Once you fill out an easy online form with the information requested and submit it, their lending platform will get you connected to the right lender.