Personal loans can be a great financial tool when used wisely. According to Market Watch, 23 million Americans have personal loans. But what are they using these loans for? Here are the eight most common uses for personal loans and how you can decide if one may be right for your situation.

1. Consolidating High-Interest Debt

One of the smartest ways to use a personal loan is to consolidate high-interest debt like credit cards. By rolling multiple credit card balances into a personal loan with a lower interest rate, you can save money each month and get out of debt faster. Just make sure to close the credit card accounts so you aren't tempted to run the balances back up! A personal loan can give you a fresh start on reducing your overall debt.

2. Financing a Major Purchase

Need a new car or want to do a home remodel? A personal loan can give you the lump sum to make a major purchase instead of charging it to a credit card or draining your savings. Fixed monthly payments can make budgeting easier than high-limit credit cards. Just be sure to shop around for the best loan rates and terms for your situation.

3. Covering Medical Expenses

Unfortunately, health issues can happen when you least expect them. Medical bills can pile up quickly. A personal loan is an option to cover large medical expenses that insurance doesn't pick up. This can prevent dipping into your retirement savings or college fund. Be sure to only borrow what you absolutely need.

4. Starting a Business

Have a dream of starting your own business but need capital to get it off the ground? A personal loan can provide startup funding without giving up equity in your company like you would with an investor. Just be sure you have a solid business plan and budget in place before taking out a loan. Pay close attention to repayment terms so loan payments don't become a burden on your new business.

5. Making Home Improvements

Want to remodel your kitchen, build a deck, or finish your basement? Home improvements often require more money upfront than most people have in their checking accounts. Personal loans allow you to fund projects to improve your home's look and value without tapping home equity. Just be careful not to go overboard on loan amounts and turn the dream remodel into a financial nightmare.

6. Taking a Vacation

After years of pinching pennies, you finally want to take that dream trip around the world. Maybe you're just looking for a family getaway to make memories. Personal loans can make that vacation possible when you don't have enough savings to pay for it. Just be sure to borrow only what you need. Automatic withdrawals from your bank account for loan payments can help keep spending in check on your trip.

7. Paying for School

College and continuing education costs can add up quickly. From tuition to books and housing, education expenses can easily exceed savings. Personal loans are an option to cover education costs after exhausting grants, scholarships, and federal student loans. Just be cautious when borrowing for school. Make sure your education and career path can support loan repayment after graduation.

8. Relocating for a Job

Landed your dream job but it requires moving across the country? A personal loan can cover moving and relocation costs like travel, deposits, rent, and more without derailing your finances. With a lump sum, you can make the move smoothly and settle into your new location. Just be conservative on loan amounts borrowed and remember that relocation bonuses are often taxable income.

Personal loans can be used for almost any purpose. But just because you can qualify for one doesn't mean you should take one out or use the full amount approved. Be wise when considering a personal loan. Make sure the payment terms fit comfortably within your budget. Read all the fine print so you understand the fees and implications if you can't repay on schedule. With the right approach, a personal loan can be a helpful financial tool without becoming a burden. When you need a personal loan or payday loan, visit us at Atlantic Finance to learn more about the options available to help you get the money you need.