What You Can Do With a Personal Loan

You’re probably already familiar with car loans or mortgages—secured loans that keep the title to your big ticket item as collateral until the sum, plus interest, is paid off. But what if you need to make a big purchase that falls outside the typical model of a secured loan? Or what if some of your other debts have gotten out of hand and you need to consolidate?

A consumer/personal loan does not require collateral, and although its fixed interest rate is often higher than that of a secured loan, it is lower than that of most credit cards. Most repayment terms fall between two to five years, so if you apply for a personal loan, you should have a clear plan for payment. Here are five common uses for a personal loan.

Debt Consolidation 

If you’re feeling overwhelmed with a number of debts, a personal loan is a great way to get organized and make a plan. By combining your debts into one monthly payment, and setting a timeframe for paying it off,  you will begin to feel more in control of your debt rather than allowing it to control you. With a lower interest rate than a credit card, a personal loan will help you meet your goals with a clear end in sight. 

Home remodeling

Remodeling projects, whether updating your bathroom or kitchen, installing a pool, or adding a new landscape or patio, will not only enrich your lifestyle but increase the value of your home over the long run. However, they can cost a lot up front! With a personal loan, you can make an investment in creating the home of your dreams now while reaping financial benefits in the future.  

Wedding 

Your wedding is the most important event of your life, and with an average price tag of over $30,000, it’s probably the most expensive one, too. Whether you’re trying to land that perfect dress, venue, or even honeymoon destination, you may not have all the money you need up front. Wedding loans (which these personal loans are often called) can help you plan the day of your dreams with more options and flexibility.  

Moving

You’ve come up with a down payment or security deposit and first month’s rent for a new place. Now you have to pay for the move! With a personal loan, you can relieve yourself from some of the financial stress of moving. Use it for a moving service or truck rental, new furniture, plane tickets and lodging, and any other expenses moving may incur.  

Start a Business

While a personal loan may not be the best option for starting a sizable business, it can be the perfect way to jump start that side hustle you’ve been daydreaming about. Get your Etsy shop up and running, invest in technology and supplies for designing an online course, or purchase a van for mobile dog grooming. By profiting off of your new business sooner, you will be able to pay off the loan and start enjoying that extra cash from your entrepreneurial adventure.