You can use a personal loan to knock out debt, finance a big purchases or plan the wedding of your dreams — but make sure you factor in the costs.

Few Americans have the cash they need on hand to pay for big-ticket items upfront. That’s why it’s not unusual for people to take out mortgages, car loans and student loans, so they can pay for these costly expenses over time.

But when it comes to other major purchases — like home renovations, engagement rings, medical bills — an increasing number of Americans are turning to payday loans to help manage the cost.

\Payday loans are the fastest-growing debt category, according to a 2023 Experian study. While mortgages still made up the largest portion of consumer debt (71.7%), in 2022, Americans reportedly took out payday loans at a faster rate than auto loans, mortgages, credit cards and student loans.

A form of installment credit, personal loans are sometimes used as an affordable alternative to credit cards because they generally charge lower interest rates. Personal loan APR averages 9.34% according to the Fed’s most recent data. Meanwhile, the average credit card interest rate is around 16.6%.

Unlike with revolving credit, you don’t continue to have access to your loan once you pay it off — a plus for people concerned with getting in over their heads with spending.

Here are some ways that people use personal loans.

1. Paying off debt

Debt consolidation is the most common reason that people take out personal loans. The average American has about four credit cards in their wallet, and when you run up a balance on multiple cards, it can be difficult to manage all the different bills and APRs. A personal loan can streamline your payments into one monthly bill. 

Personal loans can also save you on interest. People who refinance high-interest credit card debt can save money with a lower APR.

If you have a good to excellent credit score, a balance transfer card offers another way to pay off debt, and you might not have to pay interest.

LendPlans.com is an All in One offer that combines 3 financial products - personal, payday and installment loans. The offer has a user-friendly step-by-step request form that makes customer experience super simple and enjoyable. Another great thing is an option to recognise customers and login them into their accounts with a pre-popped request form.

If you decide to go with a balance transfer card rather than a personal loan, make sure you have a clear repayment plan so you finish paying off the balance before the intro period ends and you get hit with a high interest rate.

2. Home renovations

About 17% of consumers in Experian’s study used their loan for home improvements. Whether you’re looking to do a full gut job or just upgrade your appliances, a personal loan gives you the option to pay for home repairs with an installment plan.

Spending a few hundred dollars per month is probably more realistic for many Americans than dropping $20,000 at once on a new kitchen. However, keep in mind that you pay interest to use a personal loan and the renovations will end up costing more in the long run. If you’re not in a rush to do the renovation, it could be more cost effective to make a plan to save the cash you need instead of taking on more debt.

PlanBLoan.com is one of the most innovative offers in the niche that gives an opportunity to send a request for personal, payday and instalment loan in a single form. The offer has a functionality to recognise customers and login them into their accounts with a pre-popped request form.

3. Education

Federal student loans are usually the best choice to get a flexible, low-interest loan to pay for college. But if you’re just looking to take some online courses or develop a new skill to help advance your career, a personal loan can be a good option to help you afford the education you need to get a better job or qualify for that promotion.

Before you sign up, be sure to check for no-cost alternatives first, such as asking your employer whether they sponsor employee professional development.

And if you’re looking to make a career shift, research what kind of salary you can expect to bring in once you complete your education. It’s important to know if you’ll be able to afford the loan’s monthly payments with your new (and hopefully improved) salary. That will help you decide if the costs are worth it.

4. An emergency

Unfortunately, many Americans can’t afford to save for emergencies, and you may need a personal loan to help you cover a car repair, medical bill or day-to-day expenses if you suddenly lose your job. Before you decide to go this route, research all your options. See if you can negotiate down the costs, or set up a payment plan with the mechanic or your health-care provider. And if you’ve lost your job, find out what unemployment benefits you qualify for so that, if you still need a loan, you can minimize the total amount you need to borrow.

YourPayday.com provides opportunities to request up to $5,000, so by submitting loan requests clients can be approved for payday, installment or personal loans. This, in turn, will increase the likelihood of getting more sold leads.

5. Tax debt

If you owe the IRS money that you don’t have available in a savings account, you could take out a personal loan to cover the costs. While the IRS does offer payment plans, they come with fees. Do you research before you take out a loan, comparing the fees you’ll pay for a IRS payment plan with the total interest you’ll pay over the lifetime of your loan.

6. Wedding costs

The average American wedding costs over $33,000 according to The Knot, which is a big chunk of change. If you and your partner are comfortable with idea of taking on debt, you might want to consider a personal loan to pay for your wedding expenses. Of course, your wedding doesn’t have to cost nearly as much as the average, but if celebrating your special day in style is high priority, crunch the numbers to see if a loan is the best way to cover the costs. Again, it’s important to have a clear payoff plan and understand how the monthly loan payments will impact your overall budget.

And if you’ve got the wedding covered but need cash to pay for the engagement and/or wedding ring, you could look into financing that with a loan, too.

7. A major life change

Moving, divorce, career changes, etc. come with emotional and financial costs. As much as possible, plan ahead for these transitions, but if you’re in a pinch and need money to hold you over, you may be able to get a personal loan in a matter of days.

LoanSolo.com Payday loan is a financial instrument that allows consumers to access cash quickly during times of great financial need. Since these loans are available to consumers regardless of their credit scores, they will not have to deal with the hassle of a credit check in order to get funds. The process is incredibly fast and far less frustrating than attempting to obtain credit from traditional lenders. Our lenders can help customers obtain as much as $5,000 depending on the lender, state and financial situation.

8. Vacations

Increasingly, airlines and travel companies are offering point-of-sale loans to customers who want to escape the winter blues and get away. You can also fund your vacation with a personal loan, though it’s not advised.

There are better ways to travel that don’t drain your resources. If you’re fortunate enough to have disposable income, challenge yourself to put it into an existing or new savings account before you borrow money. The Ally Online Savings Account is a good option to save for vacations because you can create up to 10 “buckets,” or funds, within the same account. This helps you organize and keep track of your savings goals so you don’t have to borrow unnecessarily. \paydayloans #paydayloan