Ways to Handle Major Purchases
If your personal finances are already feeling a bit precarious, having to cover a major expense feels like a bowling ball flattening your wallet, especially if you don’t have enough money in the bank to cover it.
In fact, many turn to borrowing in this case. A recent Experian survey found that nearly half of Americans (42%) say they would rely on a personal loan to cover a major purchase. Other reasons for taking out a personal loan included paying for emergency expenses (35%), home improvement costs (33%) and education (17%).
A personal loan is a solid financing option because it’s versatile and can be used for any expense — and it generally comes with lower a APR than a credit card — but it’s also worth knowing of other financial products that are designed to help pay for specific needs, such as education for instance.
Here are three personal loan alternatives and when to use each.
Personal loan alternatives
Bad credit? You can still get funding for major expenses.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
Annual percentage rate (APR)
0% APR credit cards
- Best-in-class intro-APR offers for purchases and balance transfers
- No annual fee
- Annual statement credit
- Cell phone protection
- Rewards limited to eligible travel purchases made through the U.S. Bank Rewards Center
- No welcome bonus
- Has a foreign transaction fee
- No intro balance transfer fee
The Wells Fargo Reflect® Card can help you save on interest charges thanks to its extra generous intro-APR offer on purchases and qualifying balance transfers.
- Best-in-class intro-APR for purchases and qualifying balance transfers
- No annual fee
- Cell phone insurance: up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible
- No rewards
- No welcome bonus
- High balance transfer fee
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select’s editorial staff.
- Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
- 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. 17.49%, 23.99%, or 28.24% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate, BT fee of 5%, min: $5.
- $0 annual fee.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
- Through My Wells Fargo Deals, you can get access to personalized deals from a variety of merchants. It’s an easy way to earn cash back as an account credit when you shop, dine, or enjoy an experience simply by using an eligible Wells Fargo credit card.
Balance transfer fee
Foreign transaction fee
The Capital One VentureOne Rewards Credit Card earns transferrable miles, which is a stand-out benefit for a no-annual-fee card.
- You can transfer miles to over 15 Capital One partners, including Emirates Skywards, Choice Privileges and Singapore Airlines KrisFlyer
- No annual fee
- Limited bonus spending category that only applies to certain Capital One Travel bookings
- No travel credits and limited travel protections
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select’s editorial staff.
- Earn a bonus of 20,000 miles once you spend $500 on purchases within 3 months from account opening, equal to $200 in travel
- $0 annual fee and no foreign transaction fees
- Earn unlimited 1.25X miles on every purchase, every day
- Miles won’t expire for the life of the account and there’s no limit to how many you can earn
- Earn 5X miles on hotels, vacation rentals and rental cars booked through Capital One Travel
- Use your miles to get reimbursed for any travel purchase—or redeem by booking a trip through Capital One Travel
- Transfer your miles to your choice of 15+ travel loyalty programs
- Enjoy 0% intro APR on purchases and balance transfers for 15 months; 18.49% – 28.49% variable APR after that; balance transfer fee applies
- Top rated mobile app
Balance transfer fee
3% for the first 15 months; 4% at a promotional APR that Capital One may offer you at any other time
Foreign transaction fee
The Chase Freedom Unlimited® is a no-annual-fee card that earns generous cash-back on everyday purchases and a lucrative welcome bonus.
- Valuable welcome bonus and high rewards rates
- Long intro APR for purchases and balance transfers
- No annual fee
- Has a foreign transaction fee
- Few rewarding ongoing benefits
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select’s editorial staff.
- Limited Time Offer: Earn a $250 Bonus after you spend $500 on purchases in your first 3 months from account opening
- Enjoy 5% cash back on travel purchased through Chase TravelSM, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases.
- No minimum to redeem for cash back. You can use points to redeem for cash through an account statement credit or an electronic deposit into an eligible Chase account located in the United States!
- Enjoy 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 18.24% – 27.74%.
- No annual fee – You won’t have to pay an annual fee for all the great features that come with your Freedom Unlimited® card
- Keep tabs on your credit health, Chase Credit Journey helps you monitor your credit with free access to your latest score, alerts, and more.
- Member FDIC
Balance transfer fee
Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, in the first 60 days. After that, either $5 or 5% of the amount of each transfer, whichever is greater.
Foreign transaction fee
3% of each transaction in U.S. dollars
HELOCs
Aven Home Equity Cash lets you take out a HELOC amount as low as $5,000, making it one of the more appealing lenders on our list of best HELOCs if you need to borrow smaller amounts. PNC Bank also lets you take out a small HELOC — as little as $100 and as much as $1 million — and is a fairly reputable household name.
Aven Home Equity Cash
-
Loan types
-
Minimum credit score
-
Maximum loan-to-value
-
Home equity limits
-
Terms
5, 10, 15, 20 or 30 years
-
Availability
Aven is available in 43 states. Does not lend in Hawaii, Massachusetts, Missouri, Nevada, New York, South Carolina, Texas and Washington, D.C.
Pros
- Guarantees lowest HELOC rate or will pay $250
- States it will fund line of credit in three days
- Offers 2% cashback
- Remote closing
- Offers longer repayment period
Cons
- Only available in 39 states
- No in-person option
- 4.9% first-draw fee
PNC Bank HELOC
-
Loan types
-
Minimum credit score
-
Maximum loan-to-value
-
HELOC draw amount
-
HELOC draw period
-
Repayment period
-
Availability
Available in all states but Alaska, Hawaii, Louisiana, Mississippi, Nevada and South Dakota
Pros
- Low credit score requirement
- Wide draw range
Cons
- Only offers HELOCs
- Not available in all states
Private student loans
If you’re going back to school and need help paying for education, the first line of defense is usually to seek out every opportunity for “free money” available to you — think grants, institutional scholarships, fellowships and more. But at a certain point, you may find yourself still having a funding gap to cover.
Usually, you should consider federal student loans before private ones because federal loans get certain protections like forbearance and deferment (not all private lenders can work out these terms with you). And while you can sometimes use a personal loan to pay for school, as long as it’s not prohibited by the lender, a private loan may make more sense.
College Ave, for example, lets you borrow up to the cost of attendance with a $180,000 lifelong maximum. The company offers loans for undergraduate, graduate, international, parent, law, MBA, dental, medical and health professions.
College Ave
-
APR
3.89% to 17.99% Variable APR with autopay discount (Undergraduate New Loan). Other rates and loan types are available. Visit College Ave’s website for full details.
-
Loan types
Undergraduate, graduate, international, parent, law, MBA, dental, medical, health profession loans
-
Loan amounts
$1,000 up to the cost of attendance ($180,000 lifelong maximum)
-
Loan terms
5, 8, 10, 15 years for undergraduate loans, up to 20 years for graduate loans
-
Borrower protections
Deferment, forbearance, grace periods
-
Co-signer required?
Only for international students
-
Offer student loan refinancing?
Pros
- High loan amount
- Flexible repayment terms
- Hardship protections like deferment and forbearance
- No co-signer required for U.S. students
Cons
- Co-signer can’t be released until half of the repayment term has passed
College Ave’s student loan products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or BTG Pactual Bank, N.A., member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term
When a personal loan makes sense
There are still some instances where a personal loan is actually your better bet when it comes to handling big life expenses. For instance, personal loans are generally good options for debt consolidation since you can get a more favorable interest rate and pay down multiple debts faster.
A personal loan also comes in handy for unexpected, smaller expenses when you don’t have enough savings, like a car repair. You can usually get approved and receive funding as early as the same or next business day.
Some of the best personal lenders offer fast funding, no prepayment penalties and flexible credit score requirements. Upstart considers applicants with credit scores as low as 300 (and even considers applicants with no credit history, though, they’ll need to apply with a co-signer). Of course, we recommend applying with credit that’s as healthy as possible since your credit score impacts what interest rate you’ll get and you’ll want to make sure that interest rate is as low as possible.
SoFi is another strong personal loan lender since you can apply for up to $100,000 and have as long as 84 months to repay the loan.
Upstart Personal Loans
-
Annual percentage rate (APR)
-
Loan amounts
-
Terms
-
Credit needed
300 (but may also accept applicants with no credit history)
-
Origination fee
0% to 12% of the target amount
-
Early payoff penalty
-
Late fee
5% of the last amount due or $15, whichever is greater
Pros
- Accept applicants with low or no credit
- No early payoff fees
- Most loans funded the next business day
Cons
- High late fees
- Origination fee of 0% to 10% of the target amount
- $10 fee for paper copies of loan agreement
SoFi Personal Loans
-
Annual Percentage Rate (APR)
8.74% – 35.49% when you sign up for autopay
-
Loan purpose
Debt consolidation/refinancing, home improvement, relocation assistance or medical expenses
-
Loan amounts
-
Terms
-
Credit needed
-
Origination fee
-
Early payoff penalty
-
Late fee
Pros
- No origination fees required, no early payoff fees, no late fees
- Unemployment protection if you lose your job
- DACA recipients can apply with a creditworthy co-borrower who is a U.S. citizen/permanent resident by calling 877-936-2269
- Can have more than one SoFi loan at a time (state-permitting)
- May accept offer of employment (to start within the next 90 days) as proof of income
- Co-applicants may apply
Cons
- Applicants who are U.S. visa holders must have more than two years remaining on visa to be eligible
- No co-signers allowed (co-applicants only)
Fixed rates from 8.74% APR to 35.49% APR. APR reflect the 0.25% autopay interest rate discount and a 0.25% SoFi Plus interest rate discount. SoFi Platform personal loans are made either by SoFi Bank, N.A. or, Cross River Bank, a New Jersey State Chartered Commercial Bank, operating from its Delaware branch, Member FDIC, Equal Housing Lender. SoFi may receive compensation if you take out a loan originated by Cross River Bank. These rate ranges are current as of 02/23/26 and are subject to change without notice. Not all rates and amounts available in all states. See SoFi Personal Loan eligibility details at https://www.sofi.com/eligibility-criteria/#eligibility-personal. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors.
Subscribe to the CNBC Select Newsletter!
Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox. Sign up here.
Why trust CNBC Select?
Catch up on CNBC Select’s in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
<
