Uses of Personal Loans and Lines of Credit

If you’re deciding between a personal loan and a line of credit, it may help to understand typical uses of each.

A line of credit is often used for emergency funds or unspecified purposes with an unclear final amount, including:

  • Making emergency home improvements
  • Smoothing out cash flow problems caused by fluctuating income and expenses, which may be more likely if you’re self-employed
  • Paying a larger-than-expected bill, such as medical expenses or auto repairs

An installment loan, also knows as a personal loan, however, is often used for specified purposes with a clearer total, such as:

  • Covering a large budgeted expense, such as paying for a wedding
  • Paying for a one-time purchase, like a car or a home appliance
  • Consolidating debt at a lower interest rate than credit cards typically carry
  • Repaying money borrowed from family or friends
  • Education expenses
  • Home improvements using a home equity loan

Whether you need a personal loan or a line of credit, speak with a personal banker who can help you understand your options.


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This information is general in nature and is not intended to be legal, tax, or financial advice. Although Regions believes this information to be accurate, it cannot ensure that it will remain up to date. Statements or opinions of individuals referenced herein are their own—not Regions'. Consult an appropriate professional concerning your specific situation and for current tax rules. Regions, the Regions logo, and the LifeGreen bike are registered trademarks of Regions Bank. The LifeGreen color is a trademark of Regions Bank.