17 Things You Didn’t Know You Could Do With A Personal Loan

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A personal loan is a great way to improve not just your personal finances but your life too. If you’re not sure exactly what a personal loan is, it’s money you borrow from an online lender, bank, or credit union. People often use personal loans for debt consolidation or home improvements but you can use a personal loan for anything you want. We’ll show you 17 things you didn’t know you could do with a personal loan.

What is a Personal Loan?

A personal loan is unsecured money you borrow from a lender. Unsecured because most personal loans don’t require the borrower to provide any collateral. When you borrow money to buy a car or a home, the car or home act as collateral, if you don’t pay back the loan, the lender repossesses your car or home.

A personal loan doesn’t require collateral because most are for less than $10,000. The cost to borrow this money is the interest rate the lender charges you: the higher your credit score, the lower your interest rate. If you’re considering a personal loan, take steps to improve your credit score if it’s less than ideal. Even a small difference in interest rates can save you a substantial amount of money over the term of your loan.

The term of a personal loan is typically two to five years. Each month you’ll repay the same fixed amount which includes the principal (the amount of the loan) and the interest.

Getting a Personal Loan is fast and easy, with a number of reliable lenders offering instant online quotes. You can check your rate without affecting your credit score:

  • Credible: This online loan marketplace will show you rates from 11 lenders offering personal loans from $1,000 to $100,000 in just two minutes (a huge time saver).
  • Upstart: This loan company believes you’re more than your credit score. It takes other factors, like job history and education, into account when giving you a rate. You can get a personal loan from Upstart in amounts from $1,000 to $100,000.

What Can You Do With a Personal Loan?

The short answer is, “Anything.” Lenders typically don’t ask what the money is going to be used for beyond a perfunctory multiple choice question on some online applications. So you could take your personal loan, head to Vegas and put it on 24 black. But that is a pretty poor use of a personal loan (or any other money).

A personal loan is meant to improve your personal finances or help you afford essential things you don’t have the cash to pay for. So as we list 17 things you can do with a personal loan, you won’t see playing Roulette in Vegas on the list.

1. Consolidate Credit Card Debt

The interest rate (APR) on a credit card can range from the mid-teens to the mid-twenties. And that interest is charged on a daily basis when you carry a balance. These two factors are what make credit card debt so hard to pay off. Carry a big enough balance for a long enough period of time, and you can end up paying more in interest than you actually spent on a card.

A personal loan can pay off that credit card debt and save you a ton of money in interest. When you take out a personal loan and use it to pay off credit card debt, yes you still owe money, but a personal loan typically has a much lower interest rate than do credit cards.

If you have several credit cards, a personal loan can also simplify your bill paying. You have one payment to one place rather than debts scattered across different credit cards all with different due dates. And if you haven’t always remembered to pay your credit card bills on time, you were probably hit with a late fee which is usually $25-$38.

A late payment can also increase your APR and end up on your credit report where it will sit for seven long years hurting your credit score.

So, as you can see, credit card debt is bad, among the worst kind of debt you can carry, which makes debt consolidation with a personal loan one of the best tools in your personal finance arsenal.

2. Consolidate Student Loan Debt

Student loan debt might not seem as insidious as credit card debt because the interest rates on student loans, particularly federal student loans, isn’t outrageously high. What is outrageously high is the cost of college. So while the interest rates are low, the amounts borrowed can be tens, and in the case of advanced degrees, hundreds of thousands of dollars. When we’re talking that many zeros, even a seemingly “good” interest rate can sting.

If you’re struggling with student loan debt or have been paying for decades and still can’t seem to kill it, a personal loan can be used to consolidate your student loan debt just as it can be used to consolidate credit card debt.

The only downside to using a personal loan to consolidate federal student loans is that doing so means you can no longer take advantage of the various programs available designed to help those having trouble making their student loan payments. Private student loans offer no such programs so consolidating them with a personal loan has no downside.

3. Pay Off Payday Loans

One of the worst personal finance decisions you can make is to take out a payday loan. And the payday lenders know it. Payday loans are for desperate people with no other place to turn. The interest rates on this loans can be in the triple digits. And they become a revolving door. Payday loans are short term loans, usually with a term of just a few weeks. When the loan comes due, the borrower often can’t pay it back, so they take another. And another. And the hole gets deeper and deeper.

If you had to turn to a payday loan, you might not qualify for a personal loan, but you can get a rate quote for free and with no effect on your credit score. If you’re in payday loan hell, it’s well worth shopping around to see if you qualify for a personal loan to pay the payday loan off.

4. Pay Medical Debt and Expenses

Americans spend more than $10,000 a year per person on health care and having medical insurance is not a guarantee that you won’t be out of pocket for thousands of dollars in medical expenses. And if you don’t have medical insurance, it can be impossible to afford even basic medical care.

Your health is more important than anything, even money. If you have medical bills, you can’t pay or need medical care you can’t afford, taking out a personal loan is one of the best decisions you can make. And it can even save you money. Prevention is usually cheaper than a cure. The longer you wait to deal with a health issue, the more expensive and difficult it becomes to treat.

This all goes double for dental issues. If you have dental insurance, even a “Cadillac” policy, it rarely covers more than routine care. Untreated dental issues can not only lead to excruciating pain but to death.

5. Pay Pet Medical Expenses

This is a personal one for me. I had a much-loved cat who came down with pancreatitis, a complication of diabetes which is more common in cats than a lot of people realize. An overnight stay in the 24-hour vet (he got very ill late at night) and three days at his regular vet cost left us with a bill of about $10,000.

Luckily, we had the cash to pay for his care. And it was worth it. He lived a healthy life (diabetes in cats is pretty manageable) for another five years. But if we hadn’t had the cash to afford the vet bills, we would certainly have taken out a personal loan to cover them.

All of the pet owners I have known have considered their pet a member of the family, and they would pay whatever it took to make sure they had the medical care they need. That medical care can be expensive though, and a personal loan can ensure you don’t wipe out your emergency fund or go into credit card debt. Consider looking into pet insurance too.

6. Helping a Family Member

This one can be tricky. I’m sure we all have at least one family member who has needed money at some point. Sometimes it’s for a good reason, and sometimes it isn’t. Whether you choose to help them out or not is complicated and a personal decision.

While it’s good advice to tell someone they should never borrow money to help out a family member; sometimes the decision is not straight forward. If you have a family member who needs financial help, you can recommend they apply for a personal loan. If they’re turned down, you’ll have to make the tough decision whether or not to borrow the money yourself and lend it to them.

If you do, go in with the understanding that it might take a long time to be paid back and it might never happen at all. If you feel like a failure to be paid back would destroy your relationship with this person and you don’t trust them to pay you back, think hard. You’re going to have to pay back this personal loan no matter what.

7. Repay a Loan

Perhaps you were on the receiving end of the above scenario. You found yourself in a tight spot, and a friend or family member loaned you money to help you out. Some time has passed, maybe a lot of time, and you haven’t paid the loan back yet.

We all know that money is a touchy issue and issues around money can damage and even sever relationships. If you had to borrow money from someone, you might not be entirely out of the woods yet, but it’s worthwhile to check your rates and see if you’re now qualified to get a personal loan.

Money should never come between people, but you can understand someone being angry that money they loaned has not been paid back. A personal loan can help repair the relationship.

8. Pay a Tax Bill

Next to a notice that you have to serve jury duty, an envelope from the IRS is perhaps the worst thing you can get in the mail (unless it’s your tax refund). Nothing good happens when you owe the IRS. 

If you owe money to the IRS and don’t pay it, you’ll be charged interest and a penalty. If you fail to file on time, you’ll be charged an extra 5% of the unpaid balance every month you’re late for up to five months. If your taxes are more than 60 days overdue, you’ll either be charged a penalty equal to the amount you owe or $210, whichever is less.

If you can only afford to pay part of your tax bill, you’ll be charged 0.5% of the amount you owe for each month you fail to pay up to a maximum of 25%.

If you go months without paying your taxes, the IRS can garnish your wages, put a lien on property you own or seize your assets to satisfy your outstanding tax bill.

Taking out a personal loan can get the IRS off your back.

9. Boost Your Credit Score

If you’re considering buying a home or a new car, you should check your credit score. The higher your score, the better interest rate you will be offered on a mortgage or a car loan and the lower your interest rate, the cheaper it is to borrow that money. And when you’re borrowing the kind of money, you’ll need to buy a house or a car, every quarter of a point on the interest rate counts.

You don’t need a perfect score to get the best interest rate, so there’s no need to go chasing the much vaunted 850. A score of 750 or better is enough to get the best interest rates from lenders.

If your credit score isn’t there, a personal loan can help boost it in two ways. You can use it to pay off existing debt, and it gives you another type of credit (credit cards, student loans, and personal loans are three separate types of credit). Those who take a personal loan from Payoff to pay off credit card debt can see a jump as high as 40 points in their credit score, a substantial increase that will make you a more attractive borrower to banks.

10. Start an Emergency Fund

Everyone should have an emergency fund. You never know when you could be faced with something like a car or home repair, an illness, or a job layoff. If you don’t have an emergency fund to pay for unexpected expenses, you end up putting them on a credit card, or worse, taking out a payday loan. Not ideal.

Ideally, your emergency fund is made up of your own cash, but it can be hard and take time to build an emergency fund. And because you never know when an emergency expense will arise, using a personal loan to create an emergency fund can be a viable strategy, saving you from paying the high interest charged by credit cards and payday lenders.

11. Invest

It’s generally not recommended to borrow money to invest in the stock market because the interest rate you’re paying to borrow money may be higher than the return you can expect. But what if a really great investment opportunity came to you in the form of investing in a small business? And if you don’t act immediately, the opportunity will pass you by.

You have to do a ton of due diligence to make sure this is indeed an excellent investment opportunity. We’re not talking about your brother in law’s latest hair-brained scheme. But if it is a genuinely good opportunity, (and no investment comes without some level of risk) taking a personal loan to grab that opportunity can pay off.

12. Pay for Your Wedding

Hopefully, you will only get married once so we can understand that you want your wedding to be special and memorable. That doesn’t have to mean spending tens of thousands of dollars, but even small, relatively simple weddings can be very expensive.

You can use a personal loan to pay for wedding expenses but please, be reasonable and responsible. There seems to be a direct correlation between the amount of money spent on a wedding and the length of the marriage. The more money spent, the shorter the marriage. It’s supposed to be about the marriage, not the party. And if you’re worried about what your guests will think if you don’t have the perfect flowers, band, food, favors, etc. Let me tell you something. All wedding guests care about is whether or not there is an open bar.

Bonus tip: when buying or booking anything wedding related, flowers, catering, venue, etc., do not say it’s for a wedding. Say it’s for an anniversary or a birthday or anything but a wedding. When vendors hear the “W” word, they jack up the prices.

13. Pay for a Vacation

You should not take out a personal loan to take any old vacation. While I always think a vacation is a good use of money, it is not a good use of borrowed money in most circumstances. The exception to that is a special opportunity.

Maybe you have a large, spread out family which means it’s hard to get everyone together in the same place at the same time and it’s been several years since everyone has been together. Your family is planning a group trip, and you really want to go.

Maybe your dearest friend lives across the country from you and is getting married. Or maybe your best friend lives close by but is having a destination wedding.

These are the kinds of scenarios where it would be more acceptable to take out a personal loan to pay for a vacation. Not just because it’s February and you’re tired of winter and are thinking about a tropical getaway.

14. Pay for a Funeral

The average funeral costs about $10,000. A lot of us would be hard-pressed to come up with that much money, and when you and your family have suffered a loss, money is the last thing you want to think about. Even if you do have the money to pay for a funeral, you may be facing medical expenses incurred by the deceased (this varies widely by state, but in some community property states, a surviving spouse may be responsible for medical debts of the deceased).

A personal loan can not only help you cover funeral expenses but can help pay for everyday expenses. It can take time to access money from an estate, and the surviving spouse may have no source of income or need to take time away from work which might be unpaid.

A personal loan for the expenses we face when we lose a family member can help ease what is already an extremely stressful time.

15. IVF

Having a kid is expensive. It’s even more costly when that kid is conceived through IVF. The average cost of the first IVF cycle is $12,000. Subsequent cycles average $7,000. On average, women who conceived with IVF went through 2.7 cycles. The odds of success after three cycles for women of any age was just 34%-42%.

Whether an insurance plan covers some, all or no portion of IVF costs vary. Some cover IVF but not the required injections. Some cover a limited number of cycles. And some cover no expenses related to IVF treatment at all.

Three rounds of IVF costs as much as a pretty good downpayment on a home in some places. And the odds of having a baby after three attempts is still less than 50%. Some people will decide to cut their losses after this point, and some will continue with treatment.

Even if you’re one of the lucky ones and only need a single round of IVF, it can cost thousands of dollars depending on what your insurance covers. A personal loan can help cover the cost of starting your family.

16. Adoption

Adopting a child can be as expensive as IVF, sometimes more. The cost of a private adoption can range from $20,000-$45,000. These costs cover things including home study, legal fees, counseling, and medical expenses.

Some employers offer adoption benefits that include partial reimbursement for related expenses but the range is typically $5,000-$10,000, and while more companies are providing these benefits, they’re still relatively few and far between.

Even if you’re lucky enough to work for an employer that offers help with adoption expenses, the math still doesn’t add up, and you’re going to face a lot of out of pocket costs. And that’s just to adopt the child. Kids are expensive no matter how they join your family.

A personal loan can help you meet adoption expenses and cover unpaid time off if your employer doesn’t offer paid parental leave for new parents.

17. Home Repairs and Improvements

This is the good and the bad of owning your own home right? The bad is that the repairs are your responsibility, but the good is that you can make whatever improvements you want. You should have an emergency fund for relatively inexpensive but still urgent home repairs like a busted water heater or a toilet that needs to be replaced.

But what if you needed a new roof? That kind of repair can cost several thousand dollars. You may not have that much in your emergency fund. So you can either buy a lot of buckets (to catch the leaks!) or take out a personal loan to replace your leaking roof.

Home improvements are more fun, and the right ones can actually be a really good financial decision because they can increase the resale value of your home. Updates to kitchens and bathrooms and upgrades to the outside of your home (to improve “curb appeal”) are the best places to spend your home improvement dollars if you’re looking to sell your home in the near future.

But hey, not everything has to be about money. This is your house, and you can do what you like. If you’ve always dreamed of a Harry Potter-themed bedroom, go for it.

Either way, whether it’s to increase the value of your home if you’re considering selling or just having what you’ve always wanted, a personal loan to make home improvements is a good investment.

Where to Get a Personal Loan

You can finish reading this article and apply for a personal loan right from your computer in less than five minutes. No banks, no phone calls, no endless reams of paperwork to fill out, no endless wait to find out if you were approved or to get the money.

Online lenders have really streamlined and revolutionized the process of applying for and getting a personal loan.


By answering just a few simple questions, Credible will give you personal loan offers from up to 11 lenders in just two minutes. Credible is free to use and borrowers can get loans for as little as $1,000 to as much as $100,000.

Checking your rates does not affect your credit score and users are not obligated to accept an offer. But Credible is so sure that you’ll find the best loan rate with one of their partner lenders that they offer a Best Rate Guarantee. If you find a better rate elsewhere, Credible will pay you $200.


If your credit score isn’t sterling or you have a “thin” credit file, Upstart may be a great option for you. Upstart takes into consideration things like your level of education, your area of study, and job history, not just your credit score. You can borrow $1,000-$50,000 and can check your rate online.

There is no penalty for early repayment and borrowers can have the funds as fast as one day. Checking your rate will not affect your credit score.

Whatever Your Reasons

Clearly, some of the reasons for getting a personal loan on this list are more advisable than others. Paying off debt, especially high-interest debt like credit card debt or payday loans is one of the smartest personal finance moves you can make, and a personal loan can help you do that. That kind of debt holds you down like an anchor so getting rid of it should be a priority.

Paying medical or dental expenses is a smart use of a personal loan. Left untreated, medical and dental problems become worse, more painful, and harder and more expensive to treat.

I’m not a proponent of borrowing money to pay for a wedding, but that’s just my opinion. You can certainly take out a personal loan for that reason.

A personal loan is a financial tool that you are free to use for any reason you choose. Just be sure to choose wisely.