7 types of personal loans and their uses

At RateSetter, we prioritise flexibility: our goal is to help you reach your goals by providing a secure way to access affordable and easily managed finance.

Thanks to our innovative peer-to-peer lending model, RateSetter has been able to help thousands of borrowers with everything from paying for their weddings to planning overseas vacations. Our personal loans are designed to be versatile—so, with that in mind, here are seven different ways you could put your personal loan to use.

Consolidate your debts

If you have multiple debts—such as a credit card debt, study debt, medical bills, bank overdraft charges, and so on—you may quickly discover that the cumulative interest payments spiral out of control.

A debt consolidation loan allows you to roll all of your debts together and pay them off simultaneously at regular intervals. This provides you with peace of mind—you no longer have to worry about competing deadlines from multiple lenders—and could save you money by allowing you to take advantage of a lower interest rate. Debt consolidation loans also offer you a way to help protect your credit score by avoiding late payments or defaults on your existing loans.

Plan and pay for a wedding

A wedding loan is a form of unsecured personal loan that you can use to finance your big day. We all know that weddings can be expensive, but that doesn’t mean you have to give up on the wedding of your dreams. With a wedding loan, you can manage the costs of booking a venue, hiring a DJ, booking a photographer, buying a bridal gown, hiring caterers, and more. You’ll be able to repay the loan at regular intervals, all the while taking advantage of competitive interest rates.

Manage your medical bills

From ambulance fees to a root canal therapy therapy, medical fees that catch you off guard can add up fast. With health a top priority, it can often feel that such out of pocket expenses are unavoidable. Thankfully, medical loans can provide you with the cash you may need for surgery, dental work, physical therapy, and more. They’re particularly popular as a way to finance various elective procedures, such as cosmetic surgery, laser eye surgery, and orthodontics.

Go on your dream holiday

Dreaming of a month in Paris? A rejuvenating beachside holiday? A honeymoon in Barcelona? If you’re itching to travel, a travel loan could give you the credit you need. You can use a travel loans to pay for flights, accommodation, insurance, tours, and other costs associated with your trip, and you can repay the loan at regular intervals while benefiting from highly competitive interest rates.

Upgrade your house

Is it time to renovate the bathroom, repaint the walls, or install a gas stove in the kitchen? With a home renovation loan, you can access the cash you need to give your house some TLC, and then pay back the debt in a sensible and manageable way. Because personal loans are so versatile, you can use yours for a range of home improvement activities, from landscaping the garden to expanding the garage.

Pay your legal fees

Whether you’re contesting a property boundary or trying to resolve a family law dispute, litigation and legal advice is often very expensive, with lawyers charging from $200 to $600 an hour for standard services (barristers, of course, may charge significantly more). Of course, the pay off—if legal action allows you to avoid penalties or reach a settlement—can be well worth the initial cost.

So, if you require legal services but wish to avoid paying for them upfront, a legal loan might offer you a sensible and manageable way forward. You can use a legal loan to cover the costs of counsel and representation and then repay the loan at monthly intervals while taking advantage of a low interest rate.

Further your education

Whether you’re planning a career change, hoping to learn a language, or aiming to boost your credentials with a postgraduate degree, there’s no need for the cost of further study to be a barrier to your education. You can use a study loan to access the cash you may need for course fees, tuition, textbooks, and more. A study loan works just like a personal loan. That is, you borrow a specific amount of money and then pay it back with interest over an agreed term. It’s a simple way to use your credit rating as a springboard for learning. If your prospective student happens to be of the younger variety, a school fee loan could help you spread the costs of the school year into manageable repayments.

This information does not constitute financial advice and you should consider whether it is appropriate to your circumstances before you act in reliance on it. Any opinions, forecasts or recommendations reflect the judgement and assumptions of RateSetter as at the date of publication and may later change without notice.