The Top 11 Reasons to Get A Personal Loan

When I was thinking about all my top reasons to get a personal loan, I remembered of what my Great Aunt Irene. She was of modest means all of her life, and yet she had a great sense of humor. She laughed when she told me, “There always seems to be too much month left at the end of my money!”

The conclusion that I came to after thinking about the top reasons to get a personal loan is that things come up unexpectedly and you need a loan when you really need the money. However, some top reasons to get a personal loan, which my friends told me about, include other positive things like wanting to get married or have a baby and not being able to pay cash for all the expenses.

The Top Reasons to Get a Personal Loan

When you consider the top reasons to get a personal loan, the happy times are the great reasons. The emergencies are the unexpected reasons. The sad times, like paying for a funeral, also come up. There are other top reasons to get a personal loan, which I will explain as well. Some of them help you save money, improve your credit score, and are good financial management.

1. Consolidate Debts

Debt consolidation is a fancy term that simply means to put all your high-interest-rate debts into one pile and take out a personal loan to pay them all. This is a good move when the personal loan has a lower interest rate. This is a powerful financial technique that can save a lot of money that you would otherwise waste on paying interest.

39.2% of Americans take out a personal loan to consolidate their debt.

Let me give you an example, so you can see the math. Please note that the interest rates I used in this example are for illustrative purposes only. Your experience and interest rates may be different.

Alice Has Three Credit Cards...

  1. On credit card number one, she has a balance of $2,400 and the annual percentage rate (APR) for the interest is 18%.
  2. On credit card number two, she owes $3,500. She made the mistake of making one payment three days late when she returned from vacation. The credit card company raised her interest rate from 22% to 28% because of this tiny mistake. This can easily happen to anyone.
  3. On credit card number three, she owes $4,100 that she used to pay for the vacation. The rate for that card is 22%.
Her total credit card debt is $10,000. She is paying a small fortune in interest because if she pays the monthly minimum payments, the credit card balances never go down. On card one, she pays $432 in interest for each year that the balance remains on that card. On card two, she pays an outrageous $980 per year in interest. Finally, on card three, she pays $902 in interest. That totals $2,314 in interest that she pays every year. That is half the cost of a vacation!

Alice takes out a two-year personal loan for $10,000 that has an interest rate of 15%. Each year, she pays only $1,500 in interest. She is saving $814. More importantly, in two years the loan is completely paid off. Alice made a wise choice in consolidating her credit card debts into one personal loan with lower interest and paying it all off in two years.

2. Paying for Medical Bills

Of all the emergency expenses, paying for medical bills is probably the most common use, right after paying for the repairs of a car that breaks down. You can get away without having a working car for a while by taking public transportation but you cannot get away with suffering from ill health. Without proper medical treatment, this may be life-threatening.

In such a case, you need a loan for medical bills. I include dental bills in this category also because even if you have health insurance, few people have adequate dental insurance that covers them. If you have a bad toothache, getting it taken care of is not something that can wait.

Another good reason to take out a medical loan is not for an emergency but for an elective procedure that is beneficial, such as getting a lap-band surgery to lose weight, getting a Lasik surgery to improve eyesight, getting dental implants, or having plastic surgery to improve your looks. Since these things are elective procedures (meaning that you choose them), your insurance probably does not cover them. A medical loan is helpful because it is not that easy to pay a big medical or dental bill all at once.

3. A Wedding Loan to Finance the Big Day

Congratulations if you are getting married! Now, please sit down when I tell you that the average cost of a wedding and reception in America is over $25,000! That does not include the cost of your honeymoon. Even if your parents help out, most people need loans for wedding expenses.

This is your special day and you certainly do not want to run out of money in the middle of paying for it. Also, the number one reason for friction in any loving relationship between couples is money.

Starting out a new marriage flat broke is not a good start. It is better for most people to get a loan for wedding expenses in order to pay them off over time instead of having to pay them all at once.

The wise move is to make your wedding and reception modest. Take out a loan to pay for the expenses over time at a rate that will not drive you crazy trying to pay the debt. When you remove the pressure of having to come up with all the money at once, you can enjoy your special day and have a happy life together.

Man and woman with wedding ring.

4. A Moving Loan for Relocation Cost

OK, you got a great new job; however, it just happens to be that the company wants you to relocate to another city. They may even pay you back for your moving expense, yet only after you get there. The problem is you may have to pay these expenses out-of-pocket and then get reimbursed later.

A moving loan is another one of the top reasons to get a personal loan. Even if you move your things yourself, you will still have to pay for a rental truck and the gas to drive to the new location. You also may have to come up with security deposits for a new place and perhaps to turn on the utilities as well.

You really do not want to worry about having enough money to do all of these things while under the stress of starting in your new position. Moving loans can smooth out the financial burden that most people may have to pay these expenses. A moving loan gives you some breathing room to take care of them over time.

Any of these reasons is good enough to take out a loan, but keep in mind something while you’re reading: the most important thing you have to do is research. I want to tell you that before we continue with possible reasons for a loan. You really need to research the lender you decide to go for. Or you can get Loanry to help you. We connect you to credible lenders, and not only that. We look at the info you provide us with below, and then we connect you with lenders with whom you may qualify for a loan. So you don’t waste time applying where you don’t have a chance.

5. Taking Out a Loan for Travel

One of my favorite top reasons to get a personal loan is for a travel loan because this is more fun than most of the other top reasons to get a personal loan. You can plan a travel loan in advance along with the trip. If your dream is to visit somewhere but you cannot afford to go there, a travel loan can make it easier to pay for the trip over time.

In ten years, you probably will not remember what you paid for your dream trip; however, you will remember, for the rest of your life, if you never got to go there. If you had a chance for your dream trip and did not take it, you will likely deeply regret it.

As an example, you may be single now and then get married later. The responsibility of taking care of a family may cause you to put off going on your dream trip until it is no longer realistic to go. Or maybe, you want to take the family along on a dream trip but are not able to put out all that cash at once to pay for it. Either way, a travel loan can help.

The other good reason for a travel loan is that you may be going for a time when you are not receiving pay and your bills still need to get paid while you take the time off. Good financial planning, by taking a travel loan, helps to smooth out the rough spots and makes funds available to cover a big expense like a dream trip. This helps when you can make payments over time and not have to worry about having enough money while you enjoy your trip.

6. Paying for RV Costs

Another type of travel loan is an RV loan, which is a fun way to travel. In an RV, you are able to go plenty of places and stay wherever you like without having to pay big hotel bills. The downside is the gas is somewhat expensive to move an RV around. However, you may want to drive to a national or state park location with a campground. If it has RV hook-ups for electricity, water, and sewer, you can stay there for a small fee and have a nice vacation for a modest cost.

An RV loan can be used for travel in a rented RV or for making improvements in an RV that you own. Perhaps you want to add a satellite dish so you can enjoy satellite television when you are at a campground? Or maybe you want to add a brand-new stereo system? An RV loan is one of the top reasons to get a personal loan because of the need to finance upgrades and major repairs.

Most RV owners know that their RV is a home on wheels and needs to be taken care of like a home. Replacing a major RV system can be quite expensive. It helps to get a personal loan to take care of such a big expense, especially if the need comes up suddenly.

The last thing you would want to do is go on a summer vacation with a broken air-conditioning system. A full inspection is a part of getting an RV ready for a trip. If you discover major repairs that are needed, it is better to get these repairs done before you get out on the road.

RV camper car at the sea.

7. Rent Loans When You Can’t Pay Rent

The top reasons to get a personal loan include being able to cover the rent. Sometimes an emergency comes up that takes all the money you have in hand. For the average American, covering a $400 emergency expense is a challenge. If you use the rent money for an emergency then you need money to pay the rent! When you need help paying rent this is another one of the top reasons to get a personal loan.

8. A Loan to Pay for Legal Fees

There are some unfortunate things that can occur, which require the help of a lawyer. Another one of the top reasons to get a personal loan is for these problems. This is how to get help paying for a lawyer. If you get sued for some reason, you need legal help to protect yourself. The legal system is very unforgiving to those who do not know what they are doing and do not have proper representation by competent legal counsel.

Divorce is a common reason why people need to get a personal loan to help pay the legal bills. If there are shared assets, and the divorce is disputed, it may cost a fortune to pay the legal fees. If children are involved, the battle for custody and visitation rights can go on forever and rack up significant legal bills as well. Maybe your teenager gets into trouble and needs some criminal defense because he or she is arrested and accused of committing some horrendous crime. Maybe you get the blame for causing harm to someone else in a car accident that insurance does not cover adequately.

When you go into the first meeting with a lawyer, the initial one-hour consultation is usually free. That is when the attorney decides the merits of the case. If the case is the type that requires you to pay the legal expenses, the attorney will want you to sign a fee agreement. The attorney will also ask you to pay a deposit upfront called a “retainer.” This amount may be staggering! It is not uncommon for it to be tens of thousands of dollars. Without taking a personal loan to pay these legal bills you would not be able to legally defend yourself or protect your interests in the legal matter.

9. Emergency Repair Loans — Auto, Home, and More

Your heater goes out in the dead of winter. Your air-conditioning breaks on the hottest day of summer. Even your car can get a flat in two of the tires and you do not even have a spare. Your car suddenly conks out on the freeway and a tow truck brings it to the dealer. Yikes! These emergency needs seem to come up at the most unfortunate moments. There is no predicting them. Getting a repair loan to pay a big bill for an emergency repair is another one of the top reasons to get a personal loan.

I was curious as to why these loans for emergencies always seem to be needed on a rush basis. So, I talked to my friend who does HVAC repairs. I explained to him that repair loans are one of the top reasons to get a personal loan. I told him, we always have to help these clients find a loan source as soon as possible, and I was wondering why they are always in such a rush.

An Explanation

He explained the logic to me. Big household equipment and systems, like a furnace or a central air-conditioning unit, are more likely to break when they are running under stress than when running under less severe conditions. That is why a heater breaks in the middle of the coldest night. This is also why an air-conditioner is more likely to stop working when the temperature is scorching hot outside.

My advice to clients is to go ahead and get a personal loan application in place with one of the lenders that we can refer you to, so that if an emergency of this kind does come up, you can deal with the finalization of the loan papers as quickly as possible to get the car repaired and the heat or air-conditioning back working again right away.

10. Shopping Loans — Furniture, Electronics, Computers, and More

On the list of the top reasons to get a personal loan going shopping for something is one of the fun ones. When considering buying “big ticket” items, such as furniture, major appliances, electronics, computers, a big screen television, a large aquarium, a home entertainment center, a pool table, and anything that you plan to use for a long time; this is a good time to get a shopping loan.

It is a good idea to pick out what you want first. Total up your needs and then request a loan approval from one of the lenders that we recommend for an amount slightly higher than what you need. Use the extra money to treat yourself to a nice meal after you go bargain hunting for the things you want. When you already have the loan approval done, you can shop for the best prices. You can even ask for a discount for paying cash.

11. Paying Off Credit Cards Faster

In the first section, I talked about debt consolidation and used the example of how to use a personal loan to lower the money you are wasting on paying ridiculous amounts for credit card interest. Even though this is one of the top reasons to get a personal loan, I realize that some of you may not feel comfortable to try this strategy.

Other Best Reasons to Get a Personal Loan

What are your top reasons to get a personal loan? The Huffington Post gives some other ideas. They say taking out a personal loan and paying it back on time is a great way to improve your credit score. They even suggest taking a small personal loan for this purpose even if you don’t need the money. Hold the money aside and keep it available in case an unexpected emergency comes up. Consider the modest interest that you pay as a small cost to build up your credit history.

If you want to use this strategy, they recommend you keep the loan funds secured and safe without using them, while you let the loan “season” for at least six months before paying it off. Paying the loan off too early does not create enough records of good payment transactions on your credit history file.

Another suggestion they make is to use a personal loan to start a business, on the side, while you remain employed. This side business can provide extra cash and be a good buffer if you lose your job for some reason.


Now that we learned more about the top reasons to get a personal loan, I am sure some of these ideas fit well into your lifestyle. Be sure to borrow only the funds that you are reasonably certain that you can pay back without extraordinary stress. Remember, many of the reasons why people need a personal loan is because of an unexpected emergency.

My Great Aunt also gave me another wonderful piece of advice. She told me to put a $5 bill in a jar every week that is kept in a safe place and forget about it. I have been doing this for many years. The last time I checked, I had more than $400 in that jar to use in the case of an emergency. Thanks to my great aunt Irene, I am in a better financial condition than the majority of all Americans who don’t have $400 stashed away.


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