What Are Personal Loans Used For? This is What You Need to Know


Monday, March 9th 2020, 4:30 am
By: News On 6


Personal Loan

In a world where quick access to instant loans is becoming more commonplace, people are taking advantage of the different ways to borrow money. Research has shown that close to 20 million Canadians, or about 65% of the adult population, have taken out a personal loan at some point.

The reasons for doing so vary considerably, but it’s safe to say that most people need the occasional loan to see them through until payday. If you’re considering taking out such a loan, you might be wondering what are personal loans used for. If so, read on to find out.

What Are Personal Loans Used For? Almost Everything.

The first thing worth noting about a loan purpose is that there are actually very few limits. It’s called a personal loan for a reason.

Once you have used a reputable online platform to successfully apply for an instant loan, the money is mostly yours to do what you please with. There are a few caveats to how you can spend that money, which we will get into shortly.

Living Expenses

One of the most common uses of personal loans in Canada right now is to cover living expenses.

A rising number of Canadians are struggling to make the rent on time, which is why a personal loan can come in handy, to help tide them over until their paycheck arrives.

In addition, with the cost of groceries, utilities, transport, and public services all rising across every province, it’s unsurprising that Canadians are turning to personal loans to cover the costs.

Unexpected Bills

Personal loans are often used as an emergency resource. If you don’t have a lot of savings, an unexpected bill can wipe you out.

A broken-down car, busted boiler, or a sudden trip to the dentist can incur eye-watering costs that you might not be able to cover out-of-pocket.

The last thing you want it to be crippled by a flat tire. That’s why personal loans are becoming an increasingly popular way to stay afloat when those routine financial surprises hit.

Vacation Costs

If you’re wondering “how many loans can you have for leisure costs?”, the answer is that there isn’t really a limit. You don’t have to spend a loan on strict necessities.

With a personal loan, you are free to spend it on the costs of your next vacation to Bora Bora if you need a little extra to cover those initial flight costs before payday.

There is no-one looking over your shoulder, which is why people often choose to pay their vacation costs with a personal loan.

What Can They Not Be Used For?

That being said, personal loans are not strictly cash for whatever you want. First off, personal loans can never be used to pay off tuition.

A college will never accept personal loan money to pay tuition fees, just as a lender will never let you borrow if you are planning to use the money to pay tuition costs.

In addition, and perhaps obviously, you cannot use a personal loan for anything illegal, but you probably knew that already. You also will likely not be able to use a personal loan to access gambling funds at a casino.

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Click on our ‘Tips’ box if you have any financial advice to share with our readers.

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