What is a personal loan used for?

A personal loan can be used for all kinds of expenses. The most common reasons for a personal loan include medical bills, paying off debt, car repairs, rent or mortgage payments, school costs, home repairs, pet care, wedding planning, and moving costs. And these are just some of the uses for a personal loan, they can be used for almost any emergency expense! Because of their varying loan amounts, competitive interest rates, and flexibility with repayment terms, these loans are some of the most versatile options available. 

Once you are approved for a personal loan, you will usually get the funds within 24 hours, in most cases it will be sent straight to your bank account. Or you can have the funds mailed as a check or picked up from your lender or a retail location. Once you have the money, you can use it for whatever you need right away. The great thing is that you can split up your funds to pay for several different expenses! Repayment for these loans will begin usually 30 days after you receive your funds, so keep that in mind. 

You can find a personal loan at a bank, credit union, or private company. Financial institutions like banks and credit unions may have stricter credit and income requirements than a private lender. And so, if you don’t have the best credit score, you will want to start with private lenders. You can find them online or in-person. There are even some lenders that focus on bad credit personal loan options! 

One thing to remember is that the lower your credit score, the higher your interest rate will be for any loan product. And so, if you have some time to wait for funding, you can try and take some steps to improve your score.

Once you do pay off your current personal loan, building an emergency fund is extremely important. Although some financial emergencies you can’t plan for, there are many that adequate savings can mean avoiding debt. Having a minimum of three months of your expenses will ensure that you’ll be able to take care of a small emergency on your own rather than with a loan product.

Other Frequently Asked Questions