What can personal loans be used for?

When it comes to financial solutions, there are many options available and it can be hard to know where to start.

It’s important to understand what different types of financing, such as personal loans, can be used for, and whether it is the best option for you.

What is a personal loan

A personal loan is a form of credit in which a lender agrees to allow you to borrow a specific amount and make regular repayments to pay the amount back over a fixed term.

Loan terms can range between 1 – 7 years, while the repayment schedule can be weekly, fortnightly or monthly. As well as your loan repayments, there will also be interest rates and fees you’ll need to pay.

Unsecured personal loans don’t require an asset to be held as security for the loan, while secured loans require an asset to be held as security on the loan. Personal loans are generally unsecured, but it may depend on the lender and your personal circumstances.

Personal loans can sometimes be less expensive than credit cards and help you get the funds you need sooner. Before applying for a personal loan, work out your budget for repayments to ensure you can afford to keep up with payments.

Personal loans can be used for large purchases, however, it’s important to understand exactly what they can be used for to help you determine whether they might be the most suitable option for you.

What to use a personal loan for

Personal loans can be used for various reasons to help you get the finances you need, when you need it.


Planning your next holiday? While there are many ways to stretch the budget when travelling, you also don’t want to miss out on your dream experience.

Whether planning a big family holiday, or solo travel across multiple countries, personal loans can be used to fund travel.

Debt consolidation

If you have numerous debts or credit cards you’re currently paying off, you may want to consider a personal loan.

A personal loan will enable you to combine all outstanding balances into one monthly payment. Grouping your debt makes it easier to manage and pay off in a timely manner, which could help you save money in the long-term.

House renovations

Updating your home or completing necessary repairs can be an expensive endeavour, but personal loans can help make it more affordable.

As well as improving your quality of life, repairs and renovations can help improve the value of your home, which can be a good long-term investment.

Hobby equipment

From sporting equipment to crafting supplies, sometimes hobby equipment can be expensive, but that doesn’t mean you shouldn’t be able to do the activities you enjoy.

Personal loans may provide you with an affordable way to live the life you want, filled with activities that bring you joy.

Medical procedures

While necessary, medical procedures can often be a significant expense that many people struggle with.

You don’t want to put medical treatment off. A personal loan may help you receive the treatment you need, when you need it, rather than waiting perhaps months to save up the funds yourself.

Emergency expenses

From a car accident, to vet bills, emergency expenses can sometimes put you in a difficult financial situation that you didn’t budget for.

A personal loan may be a good option to help you get out of a tricky situation in which you need funds sooner rather than later.

Make sure a personal loan is the right option

Before applying for a personal loan, you need to make sure it’s the right option for you and what you need the funds for. Personal loans can be used to pay for many things, however, it’s important to understand that there are some limitations on what a personal loan can be used for.

Some lenders may restrict certain uses, and generally, personal loans shouldn’t be used for schooling costs, down payments or investing.

It’s also crucial to make sure you can afford to pay off your personal loan. While you may really want to go on an amazing holiday, it’s not worth it if it puts you in financial difficulty.

Consider your borrowing options and speak to a finance specialist to determine if a personal loan is the right option for you.

Getting a personal loan

Getting the best deal on a personal loan can save you a lot of money. Compare multiple lenders, loan terms and fees and find the lowest interest rate on your personal loan.

The rates available to you will depend on the loan amount and loan term as well as your personal circumstances such as credit score and reliability as a borrower. Getting advice from a finance specialist will help you understand your options and find a loan that best suits your needs and budget.

At 360 Finance, we can help you get the finance you need, whether that’s a low rate personal loan, or a car loan.


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