Spring is here, and a lot of us have been putting item after item on our To-Do lists since last Fall. If you’re one of these folks, you probably can’t wait to get started. At least until you realize your wish list was a bit bigger than your budget.
Don’t worry, that’s pretty normal and it’s exactly what personal loans were made for.
The exciting thing about personal loans is that they’re incredibly flexible! There are a lot more uses for them than you might think, and they give you a lot of room to get creative.
Here are some useful and inventive ways to use personal loans to get your brain started on what’s possible:
The “It’s Practical” Personal Loan
The traditional use for a personal loan might not sound exciting at first, but you will probably feel differently when you need the extra funds to get one of these projects done. The practical uses for personal loans are typically home-improvement projects or repairs.
As many homeowners know, some parts of your house are more expensive than you realize and fixing them might require a bit more cash than you want to spend all at once. These projects include replacing your HVAC system, electrical wiring, plumbing, or any of the other necessary parts of a home. The issue is that repairs like these aren’t always something you can plan for, and so it can be hard and kind of depressing to spend your rainy day fund on something so unexciting.
Sometimes though, you’ll want to do something that really improves your home instead of just fixing it. Saving up for a big project is a great idea, but you don’t always want to wait a year or more before making the change you want. Personal loans give you the financial flexibility to do things like finally redesign that bathroom or kitchen or build a fence for the new dog.
Another common practical way to take out a personal loan is to consolidate debt or take control of your high interest rates. If you’ve used a credit card with a high interest rate and you’re having trouble paying it down, a personal loan could give you the security of a lower interest rate.
The “Side Hustle” Personal Loan
One use for a personal loan that’s more fun, but can still be practical, is to use it to launch your side hustle. Nowadays lots of people have hobbies or skills that they’re turning into a side-business, whether that’s on an e-commerce site like Etsy or something more traditional like portrait photography.
A personal loan might be a good fit to get you set up with the equipment or materials you need to get started. Personal loans also have the added benefit of being unsecured, meaning you’re not putting something up for collateral. This means you’re not doing something quite as risky as, say, putting your house on the line if your business doesn’t take off like you expected.
That said, don’t let your ambition override common sense. Make sure you can cover the terms of the loan even without your side-hustle’s profit. There’s no sense betting the whole farm on your new business.
The “Get Active” Personal Loan
A good way to use a personal loan is to invest in yourself directly, and by that we mean investing in your personal health. Personal loans can make it easier to pick up that new hobby or fitness routine, especially if you’re looking to get specialized equipment. This is another way you can mix fun with function.
With the pandemic, it’s becoming increasingly common to think about building a home gym. The difficulty here is that gym equipment can be incredibly expensive. Picking up just one Peloton bike can set you back quite a bit of money, so if you’re planning to really furnish a private exercise room, you’ll probably need some help paying for it.
Another piece of popular new fitness equipment is the E-Bike. These hybrid electric-manual bikes are a lot of fun, but often come with a big price tag as well. If you’re itching to get moving on an E-Bike, it would certainly be one of the more fun uses for a personal loan and it’s definitely on the lower end of the loan spectrum.
The “Socially Distant” Personal Loan
Of course, while not everyone is looking to get out and about, plenty of people are just tired of the same old rooms while staying at home. The good news is that no one is going to judge you if you pass on remodeling your kitchen and fix up another room instead. If you need a change of pace in the places you spend the most time, this is a great use of a personal loan.
This could also involve revamping your entertainment centers and upgrading your technology. Or you could turn that junk room into a craft room. If you find you’re spending more time in these spaces than before, it’s absolutely worth it to make sure they’re places where you actually want to be.
Your imagination is the limit, mostly
Personal loans come with incredible flexibility and much more manageable rates than a lot of credit cards. Once they’re approved, they give you the opportunity to make a change sooner rather than later. In a lot of ways, they’re a great fit for all of the scenarios above. This doesn’t mean they’re always the best choice for every need, however.
If you’re setting your sights on truly big changes, you might be pushing the limit of what a personal loan has to offer. Or better yet, you might just want to look at a different kind of loan. If you’re looking at a boat or an RV, for example, you should probably check out our recreational vehicle loans. If you want to build some add-on to your house, you’d probably want to check out our Home Equity loans and Home Equity Lines of Credit, instead.
Keep in mind that AgFed Credit Union has the best interests of its members at heart. Not everyone qualifies for a personal loan all of the time, and your credit union wants to help you manage debt wisely. If you have questions, we’re here to help!