What can a personal loan be used for?

Personal loans can fund a variety of expenses, from family vacations and weddings to medical bills and debt consolidation. As a type of credit, personal loans can even be used to combine multiple credit card balances into a single monthly payment at a lower interest rate. Personal loan repayment options typically require fixed-amount payment installments until the balance has been paid off. 

What can a personal loan be used for?

Debt consolidation

The average American family carries $6,270 in credit card debt. Debt consolidation is a popular reason to take out a personal loan because it can pay off debt from multiple credit cards at a lower interest rate. Combining high-interest debt from numerous sources into one monthly payment can help individuals pay off the balance faster. 

Unexpected emergencies

What can a personal loan be used for? Medical emergencies, car accidents, illnesses, or funerals are major expenses that can add up quickly. The average cost of a visit to the emergency room is $2,200, and the cost of a funeral with a viewing and burial averages $7,640. A personal loan can help ease the financial burden of these expenses, especially when payments must be made in full. 

Additional financial emergencies include necessary dental work, travel for medical procedures, life-saving medications, service animals, and more. The best part? Personal loans can be obtained quickly, making them perfect for unanticipated situations.

Planned vacations

A personal loan is a great way to pay for a honeymoon, dream vacation, or expensive trip. Although this type of loan may not be the ideal way to finance an annual family getaway, it can help pay for an important experience you have been planning, so long as you know you can pay it back.

New or pre-owned vehicles

Car accidents or vehicle repairs are almost always unexpected, and these types of expenses can quickly drain one’s savings account. A personal loan can also help pay for a new or pre-owned vehicle and even costly repair work, such as a transmission or engine replacement. 

Moving expenses

Depending on distance, the average cost of a move in the US ranges from $800 to nearly $6,000. Short-distance moves can cost up to $3,000, even if you’re only moving a few miles away or to a different residence in your current city. If you’re unable to pay for a move yourself, a personal loan can help. 

In addition to the moving process, personal loans can also help pay for new furnishings for your house or apartment. This is especially useful if you’re relocating without a job or a steady source of income, allowing you to avoid draining your savings or checking account.

What is my eligibility for a personal loan?

How much do I need? 

Before applying for a personal loan, it’s essential to determine how much money you need. Remember: Personal loans aren’t free money, so you should know how and when you will pay the money back. Many financial institutions also add loan origination fees to the total amount of the personal loan, which will be deducted from the loan. 

What’s my credit score?

Depending on an individual’s credit score and history, credit unions such as Texas Tech Credit Union offer personal loans at interest rates ranging from 9.49%-17.99%*. Before the application process, take a look at your FICO rating. The higher your credit score, the lower your interest rate. 

To check your score, obtain a free credit report from Experian, Equifax, or TransUnion. Look over your report for any errors or mistakes that may negatively impact your rating, and be sure to report any issues. 

Looking for ways to improve your credit rating? Avoiding late payments, setting a budget, and paying off credit card balances are a few ways to build your credit score. 

What are my options? 

Credit unions like Texas Tech Credit Union can offer personal loans with lower interest rates than banks. Make sure to compare available interest rates, repayment plan options, and loan flexibility. 

How do I apply and get approved? 

Once you’ve determined how much you need, you can fill out an application online or in person. Ensure you have all necessary information — your name, income history, employment information, home address, credit score, contact information, loan amount desired, and reason for the personal loan. 

Make sure to review your personal loan’s interest rate, terms, conditions, and repayment plan. You should receive the funds shortly after you’ve agreed to the terms. 

How can I get a personal loan? 

A personal loan can be a convenient way to pay for medical emergencies, vacations, and more. Get started today! Click here to learn more about personal loans at Texas Tech Credit Union.

*Rates Effective: 11/14/2022. Actual rates are subject to change, based on account qualification and underwriting criteria. For Current Rates: Call (806) 742-3606.