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In the world of fast, easy credit, it can be difficult for consumers to truly explore all their options when it comes to financing purchases. One frequently overlooked tool in a buyer’s arsenal is the personal loan. Personal loans are unsecured loans that are issued on the basis of credit, but have a number of advantages over a credit card for certain purchases. Here are 4 uses for a personal loan and why you want one.

1. Buy a car from a private seller

Whenever you buy a car from a dealer, you will pay several thousand dollars more for a car than if you buy it from a private seller. Some of the fees incurred by buying from a dealer include dealer fees, dealer hold backs and destination fees - none of which you pay when buying from a private seller. Not to mention paying several thousand dollars for a warrantee that may or may not actually cover the cost of repairs to your car if it breaks down.

If you want to buy a newer car over $30,000, this is not such a big deal, but if you want to buy an older used car under $10,000, then you will most likely be paying an additional 25% of the purchase price just in dealer fees alone, without much more of a guarantee than if you bought from a private seller. Most banks will not issue auto loans unless you buy from an authorized dealer, so another way to get a car loan is to get a personal loan instead.

2. Medical expenses

While health insurance covers a great deal of medical expenses, there are a wide variety of additional expenses associated with certain medical procedures, ranging from deductibles to elective procedures. Personal loans are also a great way of covering veterinary expenses as well. Since personal loans often have lower interest rates than credit cards, they can be a great way of covering certain expenses.

3. Vacation

Every few years, you may want to take a luxe vacation to some fabulous destination, but sometimes when you try to save money it seems like something more important always comes up and eats into your vacation savings. Taking out a personal loan for a vacation means you can pull together the money you need for your vacation and pay it back in small, monthly increments.

4. Vehicle repairs

Like medical expenses, vehicles can suddenly break down without warning and sometimes suddenly require several thousand dollars in repairs. Once again, putting this on a credit card incurs prohibitively high interest rates. Taking out a person loan, however, helps you build better credit and costs you less in interest

5. Debt Consolidation

In addition to carrying a lower interest rate than credit cards, sometimes, it’s helpful to just pay one payment every month on all of your debt. Taking out a personal loan allows you to pay off a wide variety of smaller debt and consolidate it into one monthly payment and save some pretty significant money in the process.