Who uses personal loans?

Are they expensive?

People who may use personal loans come from diverse backgrounds and have a wide range of financial needs. Here are some common profiles:

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1. Small Business Starters: Entrepreneurs without access to business loans might use personal loans to fund initial startup expenses, equipment purchases, or working capital needs.

2. Credit Builders: Borrowers with limited credit history might use small personal loans to establish or improve their credit score, provided they make on-time payments.

3. Education or Training Funders: Some people use personal loans to pay for courses, certifications, or training programs not covered by student loans or financial aid.

4. Home Improvers: Homeowners looking to fund renovations, repairs, or upgrades—without tapping into home equity—often turn to personal loans for quick access to funds.

5. Major Life Event Planners: People planning significant events such as weddings, milestone birthdays, or moving to a new home might use personal loans to cover the upfront costs, then pay the loan off over time.

6. ​Emergency Expense Managers: When unexpected costs arise—such as medical bills, car repairs, or urgent travel—some individuals use personal loans as a way to get needed cash quickly.

Each borrower will have unique circumstances, but they typically seek personal loans for their flexibility, unsecured nature, and relatively quick approval process.