MoneyLion helps you find personal loan offers based on your background and info you provide. You can get matched with offers for up to $50,000 from top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you.

Can I get a personal loan to pay taxes?

If you have a decent credit score, you may be able to take out a personal loan to pay your taxes. You use the money for any purpose.  

Pros and cons of taking out a personal loan to pay taxes

Consider the benefits and drawbacks of taking out a personal loan to pay taxes.  

Pros

• Interest rate: If you have a decent credit rating, you may get a lower interest rate than with an IRS payment plan.  
• Satisfy tax debt: Once you pay off your tax debt, you don’t have the stress of dealing with the IRS.  
• No collateral: Personal loans are unsecured. You don’t need collateral, so you won’t risk losing assets like your home or bank account.  

Cons

• Cost: The interest rate with a personal loan may be higher than what you get with the IRS if you have bad credit.  
• Must qualify: Most lenders require you to meet eligibility, credit score, and income requirements to qualify.    
• May affect your credit: Your debt-to-income ratio changes when you take out a personal loan. Your credit score could drop by taking out a personal loan.  

Using a personal loan to pay taxes means that you’re switching out one type of liability for another. Although you’ll solve your tax bill, you’ll still need a clear plan to pay off the personal loan. Budgeting for loan payments is key to your long-term financial health.

How to use a personal loan to pay taxes

Follow the steps below when taking out a personal installment loan to pay taxes.  

1. Shop around and compare offers

Start by shopping around for personal loan offers. Narrow down your choices by comparing interest rates, terms, and eligibility requirements.  

2. Gather documents

Lenders often ask for documents that prove who you are, where you live, and how much money you make each year. Speed up the application process by having documents like your driver’s license, Social Security number, and W-2s readily available.  

3. Submit your application

Some lenders let you complete and submit your loan application online. You may have to complete a loan application in person at a brick-and-mortar bank.  

4. Pay your taxes

The fastest way to settle your tax debt is to make an electronic payment through IRS DirectPay or by setting up an online account with the IRS. You may also mail a check or money order. If you owe $500 or less, you can pay in cash at an authorized IRS retail partner.  

What happens if you can’t pay your taxes?

When you can’t get a personal loan, you can work out a payment plan with the IRS to pay your taxes. The IRS could garnish your wages or levy your bank account if you don’t pay your tax bill.  

Alternatives to using a personal loan to pay taxes

You can find alternative ways to pay taxes if you can’t get a personal loan.  

1. Credit card

If you have enough available credit, you could pay off what you owe on your credit card. The IRS may charge a processing fee for a credit card payment, ranging from 1.82% to 1.98%.  

However, using a credit card to pay tax debt can be costly if you have a high interest rate.  

MoneyLion can help you explore a wide variety of credit card options tailored to different needs and preferences.

2. IRS payment plan

The IRS offers short-term and long-term repayment plans. You apply for a payment plan online. If you can pay back what you owe in 180 days or less, you pay no setup fees and have greater flexibility with your payments. 

You must complete an installment agreement for a longer repayment term. Setup fees range from $31 to $225, depending on how you apply and whether you plan to make payments electronically, by check, money order, or credit card.  

3. 401(k) loan

You could borrow money from your 401(k) retirement account to pay your taxes. The upside of a 401(k) loan is that you are paying yourself back for the loan. However, if you leave your job, you have a brief time to repay the loan. You could be taxed and charged a 10% penalty for any money you don’t pay back by the deadline. 

4. Home equity loan

You can borrow against the equity built up in your home to pay your taxes. A home equity loan may get you a lower interest rate and better repayment terms than a personal loan. Since your home is collateral, you could lose your house if you don’t repay your loan.  

Liquid asset-secured financing loan

With liquid asset-secured financing, you can borrow money against the value of your investment portfolio. The value of your portfolio determines the amount you can borrow. If the market declines and your portfolio’s value falls, you may have to repay part of your loan to cover this shortfall.  

Keep the IRS off your back: Pay taxes with a personal loan

Owing money to the IRS can be scary, especially if you don’t have the money to pay your debt. By taking out a personal loan, you can pay your tax bill quickly and potentially on better terms than what you might get with the IRS.  

FAQ 

Taking on debt comes with risk, and you’ll want a clear plan for how to pay it back. However, in case of an emergency, they can be a way to spread out a big expense without straining your budget. If you choose to use a personal loan for a home renovation or business expansion, personal loans can be a way to add value to your home or company. 

In general, avoid using personal loans for non-urgent purchases. If you can wait and save funds for the purchase, you can save more in the long term. But when you need cash and cannot wait, these financial products offer the flexibility to get money when needed and use it as you choose. 

Are personal loans fixed or variable? Most personal loans are fixed-rate loans, but there are exceptions. Read on to learn about the types of personal loans you could get and how interest rates may change due to factors other than your credit score. 

MoneyLion offers a service to help you find personal loan offers. Based on the information you provide, you can get matched with offers for up to $50,000 from our top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you.

Understanding personal loan interest rates

While a home equity loan, a mortgage, or a small business loan will have stipulations about what you can use the loan for, a personal loan can be used for what you need.

You could use a personal loan to increase the value of your home before selling it or to infuse extra cash into your business. In some cases, investing in improvements in your home or business can increase its overall value beyond what you invest. While you could get a HELOC or a small business loan to make improvements, sometimes a personal loan gives you more flexibility. 

In most cases, you’ll apply for a personal loan if you need cash fast. You could also need a personal loan to cover emergency medical expenses, an unexpected vehicle repair, or major home repairs beyond your emergency fund or insurance coverage. 

Like other types of loans, personal loans charge interest rates related to rates set by the Federal Reserve or “Fed.” The federal interest rate directly affects prime interest rates available to new borrowers. In the case of variable-rate loans, the federal interest rates will continue to influence interest rates at each adjustment period. For example, your loan could be “Fed plus 6%”. In the case of a fixed-rate loan, current Fed rates when you take out the loan will affect the interest rates the lender offers.

What are fixed-rate personal loans?

While you can find a variable-rate personal loan, most personal loans are fixed-rate loans. For a fixed-rate loan, once you receive an interest rate from a lender and agree to the loan terms, your interest rate will remain the same for the duration of the loan. If you have locked in a fixed-rate personal loan and the Fed subsequently raises rates, or rates go up in the market, you will not see changes to your interest rate for your locked-in loan, and the monthly payments don’t change. Of course, this isn’t always a good thing, as you could be stuck with a higher interest rate if you take out a personal loan during high-interest periods and then rates go down.

How it works

Suppose you need $20,000 to cover unexpected medical expenses. You’ve put about $10,000 on credit cards over the past year, and have an outstanding debt of $10,000. You could take out a personal loan to pay off the remaining bills and consolidate interest rates that are lower than standard credit card interest rates. 

Average personal loan interest rates are currently around 12.10%. While that’s higher than you’ll typically see on a mortgage or auto loan, it is also significantly lower than average credit card interest rates, currently 27.94%. Interest rates depend on your credit history, income, debt, and other financial factors. 

For example, if you take out a $20,000 personal loan with a fixed 12.10% interest rate and plan to repay it in 60 months (five years), your monthly payments will be approximately $445.90. You’ll pay $6,754.02 in interest over the five-year loan. Of course, this is a simplified example that excludes origination fees and other costs with taking the loans. You’ll lock in a significantly lower APR than putting the charge on a credit card and paying it off over time, potentially saving thousands over the five year repayment period. 

When to get a fixed-rate personal loan

A fixed-rate personal loan might make sense when you need funds quickly or you want to consolidate credit card debt while locking in an interest rate. Here are the pros of this type of loan:

Pros

• You know exactly how much you’ll pay each month. 
• It’s easier to budget and plan for other expenses. 
• You can lock in a lower interest rate without worrying about changing Fed rates. 

Cons

While fixed-rate personal loans offer a lot of advantages, there are a few disadvantages to be aware of. 

• If interest rates drop, you may be locked in with a higher interest rate.
• In most cases, interest rates are above 10%, this may be a significant amount of interest. \ Taking on additional debt is a financial responsibility that extends into the future. If you are concerned you won’t be able to handle the financial responsibility in the future, maybe a personal loan isn’t a good idea at this time. 

What are variable-rate personal loans?

A variable rate loan is a loan with an interest rate that changes over time, usually after a set period of two to five years. Variable-rate personal loans are more common in mortgages or auto loans, but you can find variable-rate personal loans from a few major lenders. 

With a variable-rate personal loan, your interest rate will change after a set lock period based on an underlying benchmark or index. For example, it might change based on the federal funds rate. Your interest rate could be stated as Fed plus 5%, for example. 

How it works

Suppose you have $20,000 in medical debt and credit card debt that you want to consolidate with a variable-rate personal loan. You may choose a lender offering a five-year personal loan with six-month readjustment periods after the first year. The interest rate is Fed plus 6%. The current fed rate is 5.33%. 

All other fees and factors excluded from this example, for the first year, your interest rate is 11.33%.This may look better than a fixed loan option at first, but after the first year, your interest rate will readjust at predetermined times. With each readjustment, your monthly repayment amount will also readjust and you might owe more. There is uncertainty with how much the repayment account changes, as it often depends on market conditions. 

When to get a variable rate personal loan

You should consider a variable-rate personal loan when you want to consolidate debt, and fixed-rate loan interest rates are high. You can get a lower interest rate in the future as long as you have the financial flexibility to pay both more or less in interest over time. You can also choose a variable-rate personal loan if you expect a higher income or more flexibility in your budget in the future and don’t mind the risk of adjusting interest rates. 

Pros

The main advantage of a variable-rate personal loan is the possibility of lower interest rates. Here is an overview of the pros. 

• Secure lower interest rates in the future (potentially). 
• Peace of mind with lower interest rates than credit cards or other high-interest debt. 
• Even with a variable interest rate, you can budget and plan to pay off debt.  

Cons

There are a few disadvantages of variable-rate loans you should be aware of. These include:

• With changing interest rates, your required monthly payment amount may go up over time, making the overall cost of the loan higher than that of a fixed-rate 
• It’s difficult to plan your budget long-term because your loan amount could go up or down. 
• In most cases, interest rates are above 10%, so you’ll still pay a lot in interest. 

Should You Get a Personal Loan?

Deciding whether you need a personal loan involves considering your total financial picture, including both short-term cash needs and long-term financial goals. If the personal loan replaces high-interest debt, it may be a smart choice. But taking on debt comes with risk, and you’ll want a clear plan for how to pay it back. 

Assuming you’re using the debt for growth—and not to make purchases you can’t afford and should wait to purchase—these financial products offer the flexibility to get money when you need it. With a clear strategy and careful planning, a personal loan could be the first step to raising your credit score, paying off debt, and building your financial future, and possibly most importantly, achieving your life goals today.

FAQ

In the meantime, MoneyLion offers a service to help you find personal loan offers based on the info you provide, you can get matched with offers for up to $50,000 from our top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you. You can also use the loan funds to pay off other existing debts.

Understanding the personal loan application process

The time to get a personal loan varies based on the lender. So, it’s essential to understand the steps you will go through to get a personal loan.

Many lenders let you prequalify for personal loans so you can get an idea of how much you can borrow and the rates you’ll pay. If you meet the basic qualifications, you can move on to the formal application process. While some lenders may offer same-day approval based on your applications, others may ask for additional documentation of your employment status, income and eligibility.

When you apply for a personal loan, you undergo a hard credit check so the lender can evaluate your creditworthiness. If the lender approves your application, it can take up to one week for the funds to be deposited into your account. However, some lenders could take over a week to send money to your bank account. 

Personal loan funding timeframes

Lenders have different timelines when funding personal loans.   

Online lenders

Online lenders may be the quickest way to get money when needed. Since you apply online, you don’t waste time visiting the lender in person. Plus, they may have less stringent credit score requirements than banks or credit unions. 

Online lenders usually process applications and disburse funds within a few days. Some lenders may fund your personal loan the day you are approved. 

Banks

Some banks let you apply for a personal loan online. However, the application process can be longer if the bank requires an in-person visit to apply. 

Banks can take up to a week to process your loan application and remit funds to your account. However, if you are an existing customer, the bank could process your application and disburse funds faster. 

Credit unions

You must be a credit union member to apply for a personal loan. Like banks, some credit unions accept personal loan applications online. If not, you need to apply in person. Since credit unions usually consider the borrower’s membership history, they may be more willing to approve applicants with lower credit scores. Credit unions can take up to a week to approve your application and disburse your money. 

Other alternatives: Payday loans, pawn shop loans, and car title loans

Consider other personal loan alternatives if your credit score is low or you need cash immediately. While other options offer a quick way to get money when you’re in a bind, they come with risks.

Payday loans promise fast funds with no credit check. You typically pay back what you used from your next paycheck. However, payday loans typically charge steep fees, especially if you can’t pay back the money when it’s due.

For a pawnshop loan, you bring something of value to use as collateral. Like payday loans, there’s no credit check and you can get your money immediately. However, if you don’t repay the loan when it’s due, the pawnshop sells your collateral to recover their loss.

When you own your vehicle, you can take out a loan using your car’s title as collateral. You avoid credit checks and get your money typically within a day. A car title loan can be a quick and easy way to borrow money, but you could lose your vehicle if you don’t pay it back when due. 

Factors that influence the processing time of a personal loan

Many factors affect the processing time of a personal loan application. 

1. Loan type and amount

The amount of money you want to borrow can affect how quickly your application is processed. Lenders take on risk when loaning money. Borrowing a smaller amount of money could push your application through faster. With a larger sum, the lender may take extra time to review your application, verify your income, and evaluate whether you can afford the monthly payment.

2. Credit score and history

Lenders look to your credit score and history to ensure you will repay what you owe. As such, lenders routinely look at your record of managing past credit and on-time payments. The approval process may slow down if the lender requests additional documentation to support your loan application if you have delinquent payments or derogatory marks on your credit report. 

3. Income and employment verifications

If your income isn’t high enough or you can’t prove consistent employment, the lender may request more information to process your application. You might be asked for paycheck stubs or tax returns, or the lender could expand their employment verification. 

4. Internal process of the lending company

Each lender follows their own internal process when making personal loans. Some lenders take more time to review personal loan applications and supporting documents. Online lenders usually need less time to process and approve applications than banks and credit unions. 

How to get a personal loan faster

If you plan to take out a personal loan, there are steps you can take to speed up the process. 

Make sure your credit score is in good standing 

Lenders consider your credit history when evaluating your personal loan application. The lender may charge you a higher interest rate when your credit score isn’t high enough. Or the lender may deny your application. So, before you apply, check your score to determine the likelihood of approval. 

PRO TIP!  A good credit score can lead to lower interest rates and increased borrowing power on loans and credit cards. MoneyLion offers a free and convenient way to find offers from our trusted partners to help you improve your credit.

Get prequalified

You can find out if you can get approved for a personal loan through pre-qualification. You can find out your potential interest rate and monthly payment. Since there is no hard credit check for you to prequalify, your score doesn’t take a hit. 

Gather all necessary documents and information beforehand

Gather the necessary documents before you apply. Lenders usually ask for documents such as a driver’s license or government-issued identification, proof of income, Social Security number, and proof of where you live. Having key documents readily available helps you complete the application faster. Plus, it’s easier to supply copies to your lender if you know where these documents are. 

Apply online

Applying online, if the lender allows it, can speed up the process. Avoiding the in-person visit will also save time. 

Avoid applying for multiple loans at once

When reviewing your loan application, your credit score could drop when the lender does a hard credit pull. Submitting multiple loan applications could adversely affect your score. 

Be honest and accurate in your loan application

The more time the lender needs to review your application, the longer it takes to get your money. Submitting inaccurate information slows down the process. 

Ease Financial Stress with a Personal Loan

A personal loan can help you get the money you need to pay for an emergency expense, consolidate debt or make repairs around your home. Getting a personal loan can take time, but with a little planning, you can boost your chances of securing one quickly. 

FAQ 

Read on to learn how to get a small personal loan, qualification requirements, and alternatives you can consider. 

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What is a small personal loan?

Small personal loans are usually defined as less than $5,000. These loans are typically offered with fixed interest rates in lump sums to borrowers. Usually, you’ll pay back a small personal loan over a shorter time. Online lenders, banks, and credit unions can all be resources for small personal loans. 

How to qualify for a small personal loan

If you’re wondering whether you’ll be able to qualify for a small personal loan, you may be able to get a prequalification. Here are the main factors lenders look at: 

1. Credit score

Lenders consider credit score and credit history for loans. Generally, a credit score of 700 or above is considered good, but you may qualify for a small personal loan with a lower credit score. Some personal loans are specifically designed for borrowers with low credit scores.

Not sure what your credit score currently is? You are entitled to a free credit report from all three credit bureaus at annualcreditreport.com. On your credit report, you’ll see your credit score, but you should also look for any inaccuracies and dispute them. If you want to raise your credit score before applying for a small personal loan, here are some tips to:

• Pay all debts on time every month. You can set up automatic payments to avoid missing a deadline.
• Reduce total debt to less than 30% of current credit available.
• Don’t apply for too many new credit cards, mortgages, or loans within a short period, as each hard credit pull will appear on your credit score, and too many credit checks can reduce your credit score.
• Dispute inaccurate information on your credit report.
• Dispute inaccurate charges on your credit cards. 

2. Income 

Lenders typically consider your total income to qualify you to get a small personal loan to ensure you can repay the loan. They may also look at your debt-to-income ratio or require proof of income like a W-2, tax forms, or bank statements. 

3. Employment history

Lenders may also ask for employment history when you apply for a small personal loan. While you can get a small personal loan while working as a freelancer or being self-employed, you might need to show bank statements of assets or provide collateral.  

4. Debt-to-income ratio

Lenders usually look at your debt-to-income ratio in qualification for getting a small personal loan or any other loan. The debt-to-income ratio is the relationship between monthly debt obligations and monthly income. For example, if you earn $8,000 per month and your total monthly debt is $2,000, your debt-to-income ratio is 25%, which is great.

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Where to find small personal loans

There are several options to get small personal loans, from online lenders to traditional banks or credit unions.

1. Online lenders

Online lenders offer some of the most competitive interest rates for small personal loans. These lenders allow you to apply online, and in many cases, you’ll be approved the same day or within one to two weeks.

Pros of online lenders:

• Quick and easy application process
• Competitive interest rates and fees
• More flexible terms in some cases
• Possible to secure smaller loans 

Cons of online lenders:

• Possibly higher interest and fees — double-check terms and compare rates with multiple lenders
• You’ll need to do everything online without the convenience of going to a bank

2. Banks

Banks offer fewer smaller personal loans than online lenders or credit unions, but don’t dismiss your local branch! While banks may have different limits and guidelines for loans, many will offer personal loans of $1,000 or more. 

Pros of banks:

• Easy for borrowers with good or excellent credit to secure
• Easy to go into a local bank and get a loan
• Quick and easy application process
• Straightforward interest rates and origination fees

Cons of banks:

• Possibly higher interest and fees than other options
• Borrowers with low or no credit score might be denied the loan

3. Credit unions

Credit unions usually offer low interest rates and can help borrowers secure small personal loans. You generally need to be a credit union member to apply for the loan.

Pros of credit unions:

• Easy approval for borrowers with good or excellent credit
• Easy to go into a local credit union to apply
• Straightforward interest rates and fees
• Some of the lowest interest rates available

Cons of credit unions:

• May need to be a member of a specific credit union
• Borrowers with low or no credit score might be denied the loan

How to get a small personal loan in 4 easy steps

There are just four simple steps to apply for a personal loan. Here’s how you could apply for a small personal loan.

Step 1: Determine the loan amount and purpose

Determine how much money you need and the specific purpose for which you’re seeking the loan. This will help you find the right lender and loan terms. 

If the expense was already made or the purpose is debt consolidation, focus on what you need. For example, if you’re planning a renovation or need emergency funds, it’s important to take a realistic loan amount to save on interest. 

Step 2: Research and compare lenders

Research different lenders such as banks, credit unions, and online lenders to find the best interest rates and loan terms. Many lenders will give you an initial quote. Compare at least four to five lenders as interest rates, fees, and terms can vary widely.  

Step 3: Gather the necessary documents

When applying for loans, you may need proof of income such as W-2s or tax returns, employment details, government-issued identification documents, and bank statements. Having these ready in advance can expedite the loan application and approval process.

Step 4: Apply for the small loan

When you apply online or in person, you must submit the loan application with your chosen lender. After you apply for a small personal loan, the lender will review the information you’ve shared. It will check your credit reports and score and may give you instant approval. Sometimes, your lender may contact you with requests for additional information or with your results within one to two weeks.

Factors to consider when applying for a small personal loan

Remember that all loans come with specific requirements, interest rates, loan terms, and annual percentage rates (APRs), which can vary by lender, individual credit score, and financial profile. It’s essential to consider and weigh the following to choose the best small loans and avoid scams.

1. Requirements

Online lenders, banks, and credit unions all have set requirements for borrowers. Check these criteria and other standards to see whether you meet the general criteria. In addition, it’s important to double-check the lender’s reputation to prevent falling for scams. 

2. Interest rates

Interest rates vary widely by lenders. Be sure to carefully compare interest rates and total fees to choose the most favorable options. 

3. Loan terms

Loan repayment terms also vary. Usually, small personal loans have repayment periods of two to five years. Some lenders will allow you to repay the loan early, but others will not. Look at loan payment terms and options for repayment terms, additional fees, or penalties to ensure the loan will fit your needs. 

4. Annual Percentage Rate (APR)

APR is the total interest rate for a year rather than monthly fees or rates. This is the most accurate comparison of interest rates to consider loans and offerings from various lenders. 

5. Funding time

Funding time can be a significant factor if you’re in a hurry. Some lenders will approve your loan and offer funding the same day, while others take one to two weeks to process.  Note that faster funding time does not necessarily signify a more reliable lender. Be sure to check total interest and fees, loan terms, and compare average funding times to choose the option that best balances various considerations. 

Alternatives to small personal loans

If you need cash fast, there are alternatives to small personal loans, from online lenders or cash apps to side hustles. Here’s what you can consider:

1. Use cash apps

Cash apps offer a fast and easy way to get small personal loans through simple online applications. 

Pros of cash apps:

• Easier approval and more lenient credit requirements
• Great for borrowers looking for smaller amounts
• Straightforward interest rates and fees
• Possible lower interest rates 

Con of cash apps:

• Smaller loan amounts 

2. Borrow from family and friends

Borrowing from friends or family can be a way to get the cash you need quickly. But unless you’re careful, it could strain the relationship. To protect your relationship, write out a loan agreement and stick to it.

Pros of loans from family and friends:

• No specific approval process necessary
• Could get cash the same day
• May get lower interest rates or pay less in interest overall. 

Con from family and friends:

• If not done carefully, it could stain the relationship

3. Look for side hustles

Side hustles are a great way to bring in extra cash. Sometimes, side hustles can help you earn a few hundred dollars or grow into a full-time career. From driving an Uber or grocery deliveries to tutoring, lawn mowing or repair, or selling extra items you no longer need, there are many side hustles you could start quickly. Find ways to get cash fast or side hustles to make extra cash. 

Pros of side hustles:

• No approval needed for most
• Could start earning cash this week
• No burden of taking on a loan
• Use skills you have to build an additional income stream

Con of side hustles:

• You’ll need to build the business or side hustle, which might not be fast enough if you need cash ASAP

Getting funds when you need them

Whether you need debt consolidation and tips to pay off debt or need $1,000 quickly, like an instant payday loan, you have loan options. Remember to carefully compare loan rates, fees, and terms to choose the best choice for your needs. Need money for tuition? Learn more about private student loans here. 

FAQ 

MoneyLion offers a service to help you find personal loan offers based on the info you provide, you can get matched with offers for up to $50,000 from our top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you. You can also use the loan funds to pay off other existing debts.

13 Ways to make use of personal loans

You can use a personal loan to cover almost any expense. Here are some of the most common ways a personal loan can be useful.

1. Debt consolidation

Using a personal loan for debt consolidation is a clever way to improve your finances. You can end up with a lower interest rate and break your debt into reasonable monthly payments by consolidating debt. Using a personal loan to wipe away your credit card debt can also improve your credit. Additionally, you can bundle many smaller financial obligations into one personal loan with lower monthly payments.

Debt consolidation only works if you can get a personal loan with a lower rate than your current debt. It’s also important to consider fees, as high fees can cancel out the benefits of a lower rate.

2. Home improvements

Do you have to renovate your kitchen, bathroom, or any other part of your house? A personal loan may give you enough capital to improve your home. You might be able to stretch out your loan and add more years to the backend if you want lower monthly payments. This personal loan is an investment into your house that can increase its value and let you tap into more equity. 

3. Medical expenses

Medical expenses can add up in a hurry, and not everyone has enough time to save up for them. A personal loan can quickly give you the funds you need to cover an urgent expense. You can then pay the personal loan back over time. It may make your medical bills more manageable. 

4. Car repairs

If you get into an accident, someone hits your parked car, or it needs a part repaired, a personal loan can help. Some repairs can get expensive. Rather than paying the repair cost upfront, possibly draining an emergency fund, you can borrow capital from a lender to pay for the repair and make monthly payments on the balance.

5. Education expenses

You’ll likely have to buy textbooks, online software, computers, and other resources as part of education expenses. While these expenses can add up, a personal loan may make them more manageable. Rather than coming up with all the cash upfront, you can create a payment plan by taking out a loan. A student loan may be the best option for educational expenses, but a personal loan is a viable option.

6. Wedding costs

Most weddings cost 5-figures. While total expenses depend on your location, the venue, and other factors, you will end up with a big bill after your special day. A personal loan can give you the required funds to cover wedding costs upfront so you don’t have to postpone your big day until you and your partner have enough funds.

7. Large purchases

Some products and services go away after a few days or weeks. Some people go into bidding wars over expensive items, while other purchases are large even without a deadline. Even without urgency, some products like iPhones will always be expensive. Personal loans can give you the necessary funds to make these purchases so you don’t have to wait until your savings are high enough.

8. Tax debt

You don’t want to get into tax debt. The IRS can seize your assets. If you don’t have the cash to cover your tax debt, a personal loan can help. Opting for a longer term might make it easier to cover the monthly payments while you wipe away your tax debt. This approach only improves your finances if the personal loan’s rate and fees are lower than the tax debt’s rate and fees.

9. Travel expenses

Vacations can get expensive, but you may not have all the money in your bank account right now to fund your vacation. Sometimes, it’s better to go on the trip now instead of waiting until you save enough funds on your own. An older family member may not have much time left or the kids may be heading off to college. When time is of the essence, a personal loan can help you afford a great vacation sooner.

10. Starting a small business

Many businesses need capital to start operations. Initial investments can produce tremendous results if your business becomes successful, but you need the capital to get started. More than 25% of business owners use loans and credit cards to get their ideas off the ground.

11. Emergency expenses

Some expenses require immediate attention. You can take out a personal loan to cover these types of expenses if necessary.

12. Buying a new vehicle

A personal loan can help you buy a new vehicle. You’ll have an easier time getting the funds and can make reasonable monthly payments. Every vehicle needs a good insurance policy, and this is one of the top choices to consider if you want to save money and get great coverage.

PRO TIP! Save hundreds* on auto insurance by turning on Driver Score** in the MoneyLion app, a program that measures your safe driving habits.

13. Moving costs

A personal loan can even help with moving costs. It can cost thousands of dollars to load your belongings in a truck and have them hauled to your new property. Not everyone has enough savings to cover this expense, but banks may have extra capital readily available to help with your move.

What you should not use personal loans for

While personal loans are great financial products, it’s not always the right time to use them. Consumers with high debt shouldn’t be looking at personal loans due to higher rates and digging a deeper hole. It’s better to pay off your existing debt rather than take out a new financial product. It’s also a good idea to avoid a personal loan if you want to use the capital for a risky investment or a non-essential purchase.

A personal loan also may not be the best choice if you do not have a stable income source or aren’t sure how you will pay it back. Missing loan payments will hurt your credit score and increase your fees. It’s best to take out a personal loan for an essential expense when you are in a financial position to afford the monthly payments. It’s a good resource just in case, but it shouldn’t become a normal part of your finances.

Use a Personal Loan for Any Purchase

You can use a personal loan for almost any purchase. Lenders won’t verrify how you intend to use the money as long as you fulfill the loan’s requirements. However, just because you can use a personal loan for just about any purchase doesn’t mean you should rush to the bank each time you need extra cash. 

Trimming your expenses, growing your income, and ignoring non-essentials can strengthen your finances and make you less reliant on personal loans. That way, these financial products are readily available when you need them the most. 

FAQ

This guide will cover some of the choices for quick financing and which ones may be worth avoiding. The personal loans below can offer a good starting point.

What is a fast cash loan? 

A fast cash loan is a short-term loan that lets you receive funds either instantly or within the next day of applying. Lenders typically process fast cash loans quickly, and borrowers can access funds right when they need them the most. 

This is in contrast to traditional bank loans, which usually take several days to process. Same-day funding makes fast cash loans attractive despite their often higher interest rates. Also, some of these loans are easier to obtain than traditional loans.

How do fast cash loans work?

You can apply for fast cash loans in person or online. With a processing time typically between a few minutes to a couple of hours, fast cash loans are processed quickly. 

Most fast cash loans do not require collateral. These loan providers will still request basic information like your Social Security number, checking account details, proof of income, and your physical address. Almost every lender will request this information. 

Each fast cash loan has different repayment terms and rates. You might end up with a higher interest rate for a fast cash loan than a traditional bank loan. 

How can I find fast cash loans?

Comparing multiple loan offers can help you find the most competitive rates and terms. Getting a few percentage points off your interest rate can help you save a meaningful amount of money, especially if you follow this approach with every loan. 

You can research online lenders and see which ones offer fast cash loans. However, that process takes a lot of time and can leave you with more questions than answers. Online lending marketplaces streamline the process by submitting your loan application to numerous lenders. The MoneyLion marketplace is a great place to start, and you can find lenders like the ones listed below.

How to get fast cash without a loan

It’s possible to get fast cash without a loan. Avoiding a loan means you won’t end up with any interest or fees. These routes are good choices if you need a few hundred dollars to cover an unexpected expense. Here are some options to get cash without getting a loan:

Instacash^SM

MoneyLion offers a fast cash alternative called Instacash. Instacash is an interest-free cash advance of up to $500 of your pay, any day. Access funds in minutes* or use
free standard delivery options available. Instacash does not check your credit or impact your credit scores. Tap into your pay whenever you need it. 

Best for: Consumers who need access to funds before they get paid next.

Benefits: No monthly fees, no collateral required, no credit checks, non-impacting, fast.

Earned Wage Access (EWA)

Instacash is one earned wage access option, but there are others. These apps let you access your wages before payday so you can cover urgent expenses. Many employers offer earned wage access to increase retention and employee morale. However, your employer must use an EWA app for you to receive funds from this source.

Best for: Employees working for companies with EWA apps

Benefits: No monthly fees, no collateral required, no credit checks, fast access to cash