It’s not a credit card. It’s not a home equity loan. It’s nothing new, and yet, it’s a powerful financial tool that can provide efficient funds in times of need. Today we’re discussing the little-known personal loan, when to use it, and when to not.

Emergency Cash Needs

There are times when something simply cannot wait until payday. A repair on the car that gets you to work. A midnight visit to the vet for a sick pet. A trip to the E.R. When life hands you lemons, making lemonade can be costly. Putting those emergency expenses on a credit card can turn into years of interest and payments. A carefully considered personal loan can be the tool that breaks through the most stubborn of financial hurdles.

Debt Consolidation

One personal loan rationale that’s a no-brainer? One that saves money over the long run. And there’s one smart move that has the power to do just that: consolidating existing debt. If high interest credit cards, late fees, and billing insanity have you pulling your hair out every month, consider taking out a personal loan and paying off your multiple balances with the funds. You’ll then be left with a single bill with a single monthly payment. Those currently paying sky-high interest rates could save thousands of dollars.

Extra Spending Money? Just Say No.

Just want to refresh your closet with the season’s latest styles? Sure, a personal loan offers funds without concern for their ultimate purpose, but separating wants and needs is vital to your ultimate financial success. The personal loan is a financial tool structured for speed and convenience. Such loans don’t come without cost. Unlike some credit cards that offer 0% interest to incentive spending, a personal loan has straightforward interest rates that should be evaluated carefully and used only when waiting won’t work.

Ready to get a personal loan? Here’s what to do.

Personal loans come in lots of shapes and sizes. Most are offered in amounts ranging from $5,000 to $35,000. Make sure you select a trusted lender and compare multiple offers for the best interest rate. A loan aggregator like LendingTree can help you find a quality personal loan at a competitive rate by comparing multiple lenders with a single application.

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