Sometimes you just need a little bit of extra cash, whether it’s to consolidate high-interest debt, pay for updates to your home, get rid of medical bills, or even to help pay for your wedding.

In that case, a personal loan might be for you. A personal loan is a sum of money extended by a bank or financial services provider, which you can use for just about any purpose. You choose how much you want to borrow, then pay it back in installments, usually on a monthly basis, with interest. Some personal loans let you choose how much time you want to repay the loan, whether that’s six months, a year, or several years.

Personal loans are typically cheaper than payday loans, and they can often have lower interest rates than credit cards. And because you borrow the money for a specified period of time, you can develop a financial plan to make sure your personal loan gets paid off. 

Here’s what you should look for (and what you should avoid) when you take out a personal loan. 

Consolidate debt, repair your home, meet expenses

Personal loans can be helpful if you need money unexpectedly. You can use a personal loan to cover costs if you suddenly need to fix your roof, or if you need a new dishwasher or washing machine. Or you might take one out if you suddenly find yourself furloughed or laid off, and you need the cash to meet expenses.

You can also use personal loans to consolidate debt. For example, if you have high-interest debt on multiple credit cards, you could consolidate them into one loan with one interest rate. 

When you take out a personal loan, a bank or financial institution lends you money for a specific period of time. Like credit cards, personal loans are typically unsecured, meaning you don’t need to put up collateral for them. (That is different from a mortgage or an auto loan, which are secured by your house and your car.). 

You might choose a loan over using your credit or taking out a cash advance from your line of credit, because it’s typically much cheaper. The average interest rate for a 24-month personal loan is 9.63%, while it can be more than twice that for a cash advance.

Consider APRs and fees

Keep an eye out for the annual percentage rate (APR), or interest rate, of the personal loan before you take one out. You’ll pay back the personal loan with interest, and the interest rate tells you the rate at which the interest accrues. The APR takes into consideration the interest you pay on your loans, as well as any annual fees that you’ll have to pay on the loan for the term of repayment.

But the interest rate of a personal loan can range from 3% to 36%, depending on your credit score. If you receive an offer for a loan with a high interest, it may be wise to check out a platform where you can see multiple loan options and providers in one place.

Also remember that personal loans will charge an origination fee, a one-time charge that is typically around 1% of the total amount you borrow. You will owe that on top of the amount you borrow, plus interest charges.

Before you take out a personal loan, take a step back and look at your entire financial picture. Go through your monthly budget—which should account for expenses, savings for the short- and long-term, and investing—and make sure you’ll be able to handle monthly loan payments. If you can manage the payments and a personal loan would help you financially, you might consider one.

If something seems off, it may be!

Not all lenders are predatory, but some can be. Predatory lenders might not fully disclose the costs and fees associated with the loan, or charge consumers higher interest rates if they’re likely to default on payments. Make sure you read all the fine print and shop around to make sure you’re getting a fair interest rate based on your credit history.

Stash and our LendingTree Partnership

As with all loans, weigh the pros and cons before taking out a personal loan. Sometimes life happens, and you need money to make ends meet. Personal loans might be a more cost-effective way for you to borrow money than credit cards or payday loans.

That’s why Stash has partnered with LendingTree1. LendingTree can help you find out if you qualify for a personal loan online, within minutes. The LendingTree platform also helps you search and compare different personal loan offers, including rates and fees, so you can choose the product that may be right for you. 

Whether you need $1,000 or $50,000, LendingTree can help. You can get more information about personal loans from LendingTree here. 

Find a personal loan that works for you.

Learn more from our partner LendingTree.