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Why Do People Get Personal Loans?


We encourage anyone who needs credit to think about personal loans as a responsible way to pay for something expensive. That applies whether you’re planning ahead or something just came up. You can’t always control when you have a major expense, but you can make good decisions.

Here are the top three reasons over 2 million people have chosen to join LendingClub:

  1. Pay off high-interest debt to create a clear path to becoming debt free
  2. Pay for something unexpected, such as a medical bill, home repair, or car repair
  3. Pay for something planned, like a home remodel, vacation, or retirement party

1. Examples of paying off high interest debt

Credit card debt

By far the largest reason people tell us they need a personal loan is to pay down credit cards. While sometimes it’s because someone wasn’t paying attention to their purchases and suddenly wound up with a mountain of debt, it isn’t always that way. We often hear from customers who used credit cards to pay for car repairs, unexpected medical care, and other urgent items no one could predict. With few other options, they put them on a credit card.

Credit cards are a convenient way to pay for things, so when someone hits a rough patch in life, it’s easier to let those expenses sit on your credit card for a while. Once that person recovers, they know they need to pay off those debts, so they use a personal loan to do that.

Debt consolidation

Similar to paying down credit card debt, the second most common reason people use a personal loan is to pay off other forms of debt. This usually takes the form of debt on multiple credit cards, car loans, or even personal loans from our competitors. Often times it’s to get a lower interest rate on their debt, but sometimes it’s because the payments for those debts are too hard to juggle if they fall during the wrong time of the month.

We also hear from customers that they really value the reduction in stress in their lives that comes from knowing that they have one, simple, easy-to-understand monthly payment. For some people, the relief comes from knowing they pay for a fixed period of time rather than minimum payments that could stretch on for decades. Others value the fact that they can choose the day of the month that fits their pay schedule best.

2. Examples of unexpected expenses:

Medical expenses

Too often, medical bills can make an already bad situation catastrophic. One visit to the ER can be thousands, as can a 30-minute procedure! Whether you have insurance or not, having a seemingly insurmountable medical bill can be a huge burden, especially if your ability to work is compromised by your medical condition. A loan at a fixed rate with a manageable monthly payment has helped many of our customers get through those rough patches.

Unexpected family events

Unfortunately, the cost of unexpected family events like a divorce or passing of a loved one can be extremely expensive. The stress of the situation can snowball when bills start rolling in and it’s time to decide who pays what, when. Our customers have told us time and again that being able to take care of the financial burdens of these life events makes the whole experience a bit more manageable. That small something means a lot to us.

3. Examples of planned expenses:

Elective medical expenses not covered by insurance

Maybe there’s something that isn’t life or death but will make a big difference, like orthodontia. Or you’re welcoming a new member of the family soon – or trying to! Many of our customers utilize a personal loan to finance medical costs not covered by insurance to make sure they’re manageable with their monthly budgets.

Home improvement

We love to hear about our customers who make their house a home! From upgrading kitchens, to replacing roofs, or finally putting in a pool or spa. Whether it’s paying for remodels or a range of new appliances, a personal loan can be a great way to kick-off those long time plans.


Some of our most exciting reviews come from customers about their vacations. We love reading where people travel, what they and their families do, and the memories they create together with a little help from LendingClub.


Some of our personal loan customers tell us they need to pay off moving expenses, often for a new job they crossed the country to take. Besides the cost of paying to move their belongings, people use the funds from a personal loan to help set up their families in their new homes and communities.


We love to be part of such an exciting life event! These are some of our most heartwarming reviews, whether from parents of the bride or groom-to-be.

Investments in a home business

Sometimes a small investment in appliances can make a world of a difference in a small home business. Whether it’s special baking pans, a new lawn mower, or computer software, a small investment yields big returns for our customers. That’s a positive feedback loop we love.

Regardless of the reason our customers come to us, we are grateful for the opportunity to help people, their families, and their communities. Get started with LendingClub today.

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