What Are Personal Loans Used For? 4 Things That Might Surprise You
There are situations in your life where you may need to come up with more cash than you have in reserve — and fast. Or maybe you want to splurge on something you desperately want, but don’t have the savings for just yet.
A personal loan is one way to get a quick cash infusion that can help you meet those goals.
A personal loan is an unsecured loan, meaning you don’t have to put up collateral, such as a house or car. Best of all, you can use a personal loan for lots of things that might not be obvious.
1. Getting IVF
IVF (or “In Vitro Fertilization”) is a medical procedure in which a woman’s eggs are fertilized outside the womb, and then re-implanted in the womb with the goal of producing a viable pregnancy. It can be a lengthy and challenging process for women who need help conceiving.
And it’s pricey. The average cost of the first round of IVF is about $12,000, with a cost of $7,000 for additional cycles. Most women who conceive this way need approximately 2.7 cycles to do it.
Insurance may or may not cover IVF. Some plans cover portions of the treatment or only a limited number of cycles. But for couples desperate to conceive, the out-of-pocket costs are worth it. A personal loan can help make this process possible.
2. Buying an RV to travel the country
Ever dream of taking to the open road? A personal loan can buy you a mobile home and time to wander.
An RV might cost anywhere from $10,000 to $100,000, depending on the type you get, the space and brand, and other factors—but used models can cost much less.
Factor in the amount of money you’d need to live on as you travel, and you could potentially finance a time of exploration and discovery using a personal loan.
3. Consolidating credit card debt
This isn’t that unusual a reason for a personal loan, but a lot of people overlook it—and it’s actually a boss move.
Consolidating your credit card debt with a personal loan involves taking out a loan the size of your debt, using it to pay off multiple credit cards, and then paying off the single personal loan rather than a number of credit cards.
You’ll probably score a lower interest rate by doing this, as personal loans typically have much-lower interest rates than credit cards do—and if your credit score is good, this is even more likely.
But if your credit score isn’t great, a personal loan can help improve it—by replacing your “revolving” debt with “Installment” debt (which is better for your score). A personal loan can also diversify your debt mix and reduce your credit-utilization ratio—or the amount of deb you have vs. the limits on your credit cards. All of these moves can give your credit a boost within a few months or so.
4. Pursuing a passion project
Lots of people say they want to write a book. But how many actually do it?
Perhaps one of the reasons so few actually meet this goal is that following a dream takes time and dedication. Sure, some authors do manage to whip out novels quickly by snatching shreds of time in the margins of their lives, but this isn’t the norm for many.
One of the frustrating things about US workplace policies is that extended time off is difficult to come by. The average American employee gets approximately 15 days of vacation time per year—which we can all probably agree is not enough time to write a book or build that cabin in the woods.
A personal loan can buy you time to throw yourself at that passion project that you’ve been putting off for years.
What's your next move?
Personal loans can give you an influx of cash to do something you’ve always wanted to—whether that’s start a family, travel the country, devote yourself to a passion project, or crush your debt.
Check out our current picks for the best deals on personal loans. At the top of our list? Citizens Bank. We like them for their fast approvals, competitive interest rates and discount opportunities. Check them out here.