You can fix a house; marry your spouse; buy a horse, a boat or a car; put in a pool; pay for school; you can even travel afar.
The point is, you can use a personal loan for just about anything. And people do.
Prosper Marketplace, one of the largest online marketplace lenders, says more than half of the loans it originates are for debt consolidation. The San Francisco-based company, much like other lenders, also says its home improvement loan business is quickly growing.
There are only a few things most lenders won’t let you use a personal loan for, including for investing, illegal activities and gambling. Many lenders also won’t let you spend the cash on college expenses, including tuition, books and room and board.
But the flexibility in what you can put your loan toward is part of the appeal, and it makes for some interesting stories about the unusual ways people use personal loans. Here are 3.
Jackie and Andrew Metzger had spent what little savings they had left after buying their first home 2 years ago to fund what were ultimately unsuccessful infertility treatments. Then they looked to adopt a child, only to realize the average adoption costs between $30,000 and $40,000.
“We didn’t know what we were going to do. Really, we had no idea,” says Andrew Metzger. The adoption specialist helping the couple offered encouragement, but the Metzgers were left to find the means on their own.
The couple was turned down for a bank loan, so looked to a marketplace lender for help.
“I was a little skeptical at first because I had never heard of it,” Metzger says. “Prosper was definitely not our first option. And I wouldn’t have found it if I hadn’t been banging my head against the wall for as long as I had been.”
The Metzgers were approved for a 15-year loan the same day they applied. Using the Prosper loan and another bank loan and withdrawing funds from a 401(k) account, the parents-to-be completed the adoption. They welcomed a baby girl in July 2015 to their Tri-State Area home.
Now they want other couples looking to adopt to learn about alternative funding sources.
“You’re definitely not down and out when the bank says ‘no,’ ” Metzger says.
“I loved watching those flipping shows. I would always watch them and wonder, ‘How do they do this?'” Hidey says. “And I thought, ‘That would be fun.'”
So she took a real estate class and realized she could make a go at buying, renovating and reselling a home — if only she had the money.
She and her husband, Brian, had enough equity in their home to buy a fixer-upper. But they still needed cash for repairs. “Where do you get the money if you’re not taking out a mortgage?” she says.
The Hideys joined a real estate investing club, which introduced them to “creative financing,” like a personal loan. They bought a home in the Detroit suburb of Redford, Michigan, and took out a $30,000, 84-month personal loan from LightStream, a division of Atlanta-based SunTrust Bank.
“With the help of that loan, we were able to renovate that house,” Hidey says. “We spent $2,000 out of pocket.”
When the couple put the house on the market earlier this year, they had multiple offers the first day.
They hope to flip 2 more houses this year using a personal loan.
There are numerous examples of entrepreneurs taking out a personal loan to help start a business. Jennifer Johnson didn’t need a loan to get her business off the ground; she needed one to take it on the road.
About 2 years after Johnson opened Pro Do Blow Dry Bar in Salt Lake City, she came up with an idea to create a mobile salon that could cater to proms, weddings and birthday parties.
So she bought a bus.
Johnson had planned to take out a bank loan to fund her idea, but the bank rejected the loan despite her “bulletproof” application. So she turned to Prosper and bought “Audrey,” a 40-foot private coach bus, which she and her family gutted and remodeled, adding 3 hairdressing stations with shampoo sinks.
“I knew with everybody craving convenience these days, it would take blow-dry bars to the next level,” she says in a YouTube video about the bus.