Can I Use a Personal Loan for This? 6 Situations You May Be Considering
Personal loans can be used for so much more than getting yourself out of a jam. They can be used to help you achieve your dreams.
Consolidating your debt. Paying off a medical expense. Funding an emergency. These are some of the situations that might come to your mind when you think about taking out a personal loan. However, a personal loan can also be an effective tool to help finance your goals.
Whether it’s remodeling your home, getting invisible aligners, or bringing the wedding of your dreams to life, a personal loan can be used for a variety of goals.
Financing a Wedding
Many people fantasize about their wedding long before they ever say, “I do.” What many people don’t think about, however, is the price tag associated with their perfect day. Hiring a wedding planner, a caterer, picking a wedding dress or tuxedo, choosing a venue, and providing entertainment are just some of the major expenses associated with weddings. While using a credit card to pay for some expenses may seem like the easiest way to pay for your wedding, it’s important to carefully evaluate all available options.
Credit cards and personal loans are two potential financing options. Unlike credit card debt, which can easily snowball into long-term debt, a personal loan will give you a predictable repayment schedule with a set payoff date. Plus, because some online lenders like LendingPoint evaluate more than your credit score when determining your eligibility, personal loans can be a good option for those with less-than-perfect credit.
Paying for Invisible Aligners or Braces
Braces aren’t just for teenagers anymore. In fact, it’s estimated that 20–25% of orthodontic patients are adults.1 Some studies have shown that straightening their teeth can be an influential factor in someone’s self-confidence and can even possibly contribute to personal and professional success.
However, like other forms of cosmetic dentistry, many insurance companies consider braces and invisible aligners to be elective procedures, which means you’ll be left to pay for these costs out of your own pocket. Although the total cost of getting braces or invisible aligners can vary based on factors like where you live and how long you’ll need them, they typically cost anywhere from $3,000 to as much as $13,000.2 If you’re unable to pay out-of-pocket, there are several ways to finance invisible aligners, braces, or other forms of cosmetic dentistry. Some providers offer financing through medical credit card companies. Like a standard credit card, medical credit cards are a form of revolving debt, however, they can only be used to finance health and wellness services. If you’re hoping to reduce your credit utilization and avoid accruing revolving debt, a personal loan is another option to consider. Before you make a decision, it’s important to understand the differences between credit cards vs. personal loans. Be sure to check your rate options, consider the impact to your credit score, and consider your ability to repay the debt.
Growing Your Family
Nursery essentials, clothing, medical expenses — these are just a few of the costs that can add up when you’re preparing to welcome a baby. Plus, given that just one in five Americans have access to paid family leave many new parents will experience some degree of financial strain during this period.3
To help bridge the gap, one option is to consider a personal loan for maternity leave. Not only can it alleviate some of the strain caused by lost income, but a personal loan can also be used to give your finances that extra boost they might need to deal with the increase in spending you’ll likely experience after your baby is born. Plus, because your debt will be concentrated into a single payment, it can be easier to track your repayment progress.
You may also be considering adoption or fertility treatments as part of your family planning journey. These paths can often come with significant costs, and a personal loan could be one way to help you finance these processes. No matter how you’re able to grow your family, doing so without worrying about your finances is an important part of starting your next chapter confidently.
Been dreaming of that beach trip to Mexico? Vacation costs can add up quickly when you factor in hotels, airfare, excursions, and more. While saving ahead for your next trip is always the best option, there’s a good chance that your vacation will still make a sizable dent in your wallet. As a result, many people use their credit card to purchase flights or book hotel stays. While using a rewards credit card to book travel may offer certain benefits such as the ability to earn miles or cashback, it’s important to remember that if your debt isn’t paid off in a timely manner, the costs associated with your dream vacation can quickly turn into long-term debt. If you’re unable to pay off your debt quickly, a personal loan can be another option for vacation financing. With a set repayment schedule and pre-determined payoff debt, it can help ensure your dream vacation is paid off in a timely manner.
Purchasing a Car
Buying a car can be a symbol of freedom for many. It means being able to go where you want, when you want. However, despite being an essential purchase for many people, traditional auto loans aren’t always an option for some. For example, many banks have limitations on the types of vehicles they’ll finance. Generally, cars older than ten years old — regardless of condition — won’t qualify for a traditional auto loan.4 Condition, price, and mileage are a few additional factors that may make it difficult to finance a vehicle through traditional means.
If you’re looking for alternatives to auto loans, a personal loan is one option to consider. Many online lenders will allow you to check your rate options online with no impact to your credit score, and some online lenders offer quick funding — often within one business day of approval.
Renovating Your Home
Installing new kitchen countertops or updating your bathroom? Whether you’re renovating your home to improve its value for a future sale or simply want to redo your living space, there are many reasons why you might want to renovate your home. But, depending on the project you’re undertaking, that could be an expensive proposition. The average cost to remodel a home can range anywhere from nearly $20,000 to more than $73,000.5 Your costs can vary dramatically based on your home’s size, the scope of your project, the materials you’re using, and more.
While home equity loans and home equity lines of credit (HELOC) are two popular financing options, they require you to have a certain amount of equity built up into your home. If you’ve just purchased your home and don’t have enough equity built up, a personal loan can be used to fund home renovations. Learn more about the difference between using a HELOC vs. personal loan to fund home renovations.
Taking out a personal loan is one of several options you may consider to give your finances a boost. Before deciding, it’s important to review all your options to understand the process of taking out a personal loan.
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- “Orthodontic Treatment of a Periodontally Affected Adult Patient (Case Report),” July 20, 2019, National Institutes of Health
- “How Much Do Braces Cost?” April 1, 2021, Healthline
- “National Compensation Survey: Employee Benefits in the United States, March 2020,” Sept. 2020, U.S. Bureau of Labor Statistics
- “Can I Finance an Older Car?” Feb. 4, 2022, Kelley Blue Book
- “How Much Does It Cost to Remodel or Renovate a House?” July 19, 2021, HomeGuide