Not every financial need is a full-blown emergency. Sometimes, life just throws you a curveball — or an opportunity — and you need a little extra cash to handle it smoothly.
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That’s where a personal loan can come in handy. From covering big life moments to tidying up your finances — here are some non-emergencies where taking out a personal loan might actually make a lot of sense.
Consolidate High-Interest Credit Card Debt
According to Lending Tree, Americans have an absolute mountain of credit card debt — $1.18 trillion, to be exact.
Chris Heerlein, CEO of REAP Financial, noted that a personal loan can make sense when used to consolidate high-interest credit card debt.
He worked with a client carrying multiple cards with rates above 20%. “We used a personal loan with a lower fixed rate to wipe that out,” said Heerlien.
It immediately reduced their monthly interest burden and simplified their payments into one. It wasn’t an emergency, but it gave them breathing room and helped improve their credit score over time.
Dennis Shirshikov, professor of finance at City University of New York and head of growth and engineering at Growth Limit, similarly agreed. He said that among the most common overlooked examples is taking out a personal loan to pay off higher-interest credit card debt.
What’s frequently overlooked is that the psychological effect of going from multiple high-interest revolving uses of debt to a single fixed monthly payment can be transformative.
“It’s not just a loan, you’re not just refinancing — you’re resetting your theoretical money model,” said Shirshikov.
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Starting a Little Side-Hustle or Micro-Business
According to Shirshikov, most traditional banks will not issue a business loan for a $5,000 idea, but a personal loan can be a bridge within reach.
He’s personally seen new entrepreneurs borrow small sums to purchase equipment or inventory for their Amazon FBA (Fulfillment by Amazon), mobile detailing business or Etsy storefront.
“The trick is to see the loan as a short-term shot in the arm, not a crutch,” he said.
Requiring Life-Altering Medical Procedures
Another example? Medical procedures that are not emergencies but are life-altering. Think dental implants or fertility services. These aren’t luxuries; they’re delayed necessities that don’t easily come under insurance coverage.
Personal loans, Shirshikov explained, especially those with clearly defined repayment terms, can give people the chance to take charge of their health without capsizing their financial lives.
Spending on Professional Development
Even spending money on professional development — like an executive master of business administration (M.B.A.) class, a coding boot camp, or a specialized certificate — may be reasonable.
“You’re borrowing against your future earning potential, essentially, and when the return on investment (ROI) is clear, the math usually adds up,” said Shirshikov.
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This article originally appeared on GOBankingRates.com: 4 Non-Emergencies Where a Personal Loan Makes Sense
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