Using Personal Loans to Fund Milestones from Adoption to Retirement

Life is filled with important moments that are often gated by a hefty price tag. Personal loans are a practical way to fund milestones, like weddings, adoptions, and home renovation projects. You can use the funds flexibly and choose a loan term that aligns with your repayment capacity.

Let’s go over the pros and cons of using personal loans to fund different milestones and how to make the most out of a personal loan.

Understanding Personal Loans

Personal loans are a type of loan that lets you borrow a lump sum from an online lender, bank, or credit union. Personal loans are extremely versatile since you can use the loan for almost any purpose. Most personal loans provide between $1,000 and $50,000, and must be repaid within 2 to 7 years.

A secured personal loan is backed by collateral. A collateral asset is something you pledge when taking out the loan. The asset can be seized in case you default on your loan. Common collateral includes: property, vehicles, jewelry, insurance policies, and cash accounts.

An unsecured personal loan is not backed by any collateral. Unsecured loans are harder to obtain since the lender takes on greater risk. You will need a higher credit score for an unsecured loan. Most personal loans are unsecured.

Not everyone should take a personal loan out for funding life milestones, but it can be immensely valuable. Here are the pros and cons.

Pros:

• Fast funding
• Flexible usage
• Good for debt consolidation
• Good for emergencies and large projects

Cons:

• Interest rate depends on your credit score
• Long repayment terms may mean a greater financial burden
• Not good for the financially irresponsible

Key factors to consider before taking out a personal loan

Interest rate: The interest rate is the cost of borrowing. Interest rates typically fall between 6% and 36%. The better your credit score, the more likely you can obtain a lower interest loan. Remember–lenders are competing for your business too. As long as you keep an open mind and use the right loan comparison tools, you can minimize your interest rate and find better borrowing terms.

Loan term: The loan term or tenure is how long you have to repay the personal loan. You are usually expected to pay back the loan during a period of 2 to 7 years. Early repayment, whether in installments or the loan’s entirety, usually means a prepayment penalty, but sometimes it helps you save on interest.

Potential fees: Personal loans may come with hidden fees, so it’s crucial to read the loan agreement carefully. Common fees include late fees, origination fees (essentially the application fee), and early repayment fees.

Credit score impact: Responsibly paying off a loan is actually a great opportunity to improve your credit score in the long term. It proves to lenders that you can manage a loan repayment plan and have sufficient means to pay off debt. However, failing to pay back a loan or constantly missing payments can lead to severe credit score damage. This can make it much harder to obtain lines of credit or financial opportunities in the future.

Financing Adoption with Personal Loans

Welcoming a new baby to the family is a truly happy day. However, adoptions can be expensive if you opt for a private or international adoption. The adoption cost, including agency and attorney fees, typically ranges from $20,000 to $45,000. If you need to travel for an international adopt, you would also need to pay for travel fees.

Other than personal loans, you might also want to consider financial alternatives. Let’s compare using a personal loan for adoption with using alternative funding methods.

Adoption grants: Non-profit organizations, foundations, and government agencies offer plenty of grants that cover adoption expenses.

U.S. government adoption tax credit: Always check to see if there is a federal adoption tax credit. Tax credits vary per year. The 2025 tax year adoption tax credit is $17,280. According to the IRS, any unused adoption credit amounts may be used for 5 future years.

Employer adoption assistance benefit: Some employers offer adoption benefits. This usually means a one-time payment between $1,000 and $15,000.

Fundraiser: Benefit concerts, adoption parties, and crowdraising are possible ways to fund your adoption. Running a fundraiser requires sharing your story with the community, gathering a team, and hosting performances or events. If you’re having a wedding, you may also want to request donations towards your adoption fundraiser instead of wedding gifts.

Using Personal Loans for Wedding Expenses

Hear those wedding bells? We sure do. Personal loans for weddings are increasingly popular as average weddings cost around $30,000, far exceeding most people’s savings. From the venue to the catering, it’s a wonderful process to plan your dream wedding, but the expenses are no joke.

Here is a breakdown of the major costs of a wedding that can be funded by a personal loan:

• Bride’s dress and/or groom’s suit: Can cost thousands of dollars
• Rings: Engagement and/or wedding rings can cost thousands
• Cultural celebrations
• Wedding photographer: ~$363 an hour
• Entertainment: DJs and live bands are popular, and may cost several thousands
• Decor
• Invitations
• Travel accommodations

If you need to budget for a wedding with a personal loan, here are some generic tips to help you avoid financial strain:

• Budget in a spreadsheet before borrowing
• Borrow only what you need
• Compare interest rates and loan terms
• Consider renting instead of buying
• See if family and friends might help you cover specific expenses
• Use credit cards for minor purchases

Don’t forget to factor in a honeymoon’s cost if that’s in your plans.

Personal Loans for Educational Opportunities

Pursuing non-traditional education paths can be a stressful process. If you don’t qualify for federal student aid, it may feel hopeless. The good news is that trade schools, coding bootcamps, and adult education can be funded by personal loans.

Education is an investment of time, effort, and money. It’s a stepping stone to a new, exciting future. If you’re running low on savings, personal loans can open up the door to useful education programs.

Before taking out a loan to join a sector-specific bootcamp, be sure to research carefully to see if that bootcamp (or educational program) can help you in your desired career path or your passion. Not all programs are functionally useful, and new types of scams are constantly showing up in today’s society.

It’s important to manage loan repayment while transitioning careers or building your skills. Here are some ways to make loan repayment easier:

• Take a financial literacy course–many free workshops exist
• Set up phone reminder notifications
• Improve your credit score before taking out the loan
• Prioritize loan payments like they’re an essential

Note: Personal loan providers typically prohibit you from using personal loans for college tuition. College costs are one of the few things for which you probably should not take out a personal loan.

Funding Major Health Procedures with Personal Loans

Unfortunately, most people know what it’s like to dread medical bills. Health insurance often denies claims and may not cover medical costs, like specialized treatments or surgeries classified as elective.

Personal loans are a good way to fund medical procedures that you would otherwise be unable to afford. They’re a versatile source of funding that doesn’t depend on what type of medical bill you need to pay. As long as you are approved for the loan, you can use the funds as needed.

Personal loans are also fast, which means if you need money for urgent medical fees, they are one of the best ways to obtain funding.

Before you decide to take out a personal loan for healthcare, here are some considerations:

• How much money do you need to borrow? Medical expenses can include follow-up treatments, hidden fees, long-term medications, and other bills. Be sure your loan amount matches your expected expenses
• How will you pay back the loan after your medical procedure? This is especially important if you might have any long-term health concerns
• Do you have time to raise your credit score first?
• Look into alternative funding options for healthcare bills, such as healthcare provider payment plans, medical credit cards, crowdfunding, and financial assistance programs

Personal Loans for Home Renovation Projects

Home renovation projects are an exciting way to enhance your living conditions or home value. A project can cost anything from $5,000 to $100,000. Whether you want to add a pool to your house or want to renovate the kitchen, the quality of materials and design complexity can also greatly affect the cost.

You should assess the return on investment (ROI) for your financed home improvements before taking out a large personal loan. For example, a kitchen renovation or remodeling can greatly increase the appeal of your home–unless there are other glaring issues that can hurt the real estate. To get a decent ROI on home renovations, try to keep costs low. Upscale remodels may not necessarily give you a good ROI, since high-end features may not seem worth it to many potential buyers.

To manage loan repayments and home renovation budgets effectively, here are some tips:

• Set a realistic budget
• Compare loan providers
• Plan for repayment even if the home value doesn’t go up/there is no resale
• Choose a loan term that matches your project timeline
• Track expenditures and compare them to your initial budget
• Prioritize loan payments

Preparing for Retirement with Personal Loans

Not everyone has enough savings for retirement. A personal loan may be able to help you alleviate your debt burden or cover unexpected expenses. Common reasons to take out a personal loan when approaching retirement:

• You need to consolidate high-interest debt
• You have unexpected medical bills
• You need to downsize your home

Taking on debt close to retirement is a risky move, but sometimes it’s not for the reward but out of pure necessity. It can be invaluable in preserving your nest egg for your retirement and/or family members.

Risk mitigation strategies can help you better manage loan repayment after retirement. Here are some key points to keep in mind before taking out a personal loan for retirement:

• Consider you’ll be on a fixed retirement income
• Calculate if you’ll be able to meet the loan terms
• Can you prioritize loan payments
• Other financial strategies may be helpful, like home equity loans or life insurance plans

Summary

A lot of milestones are once-in-a-lifetime. Don’t miss out on them just because the upfront cost is too high. Personal loans can act as a valuable lifeline, though they are riskier than using your savings. Since they’re flexible use, you can take out one loan for multiple purposes, saving time and mitigating the impact of credit checks.

Pros:

• Fast, possibly same-day funding
• Better credit score, lower interest rate
• Collateral not required
• Fixed payments = more predictable debt
• Can help boost credit score

Cons:

• Potentially high interest rate
• Risk of overborrowing
• Long loan terms mean a longer debt burden
• Application fees and late fees
• Potentially negative impact on credit score

With careful financial assessment and informed decisions, you can make the most out of a personal loan for any life milestone.

We make it easy to compare loan terms. Check out our expertly ranked list of the best personal loans for milestones. Top loan providers include:

• Credible
• Lending Tree
• LightStream
• Amone
• Fiona

About The Author

Ru Chen

Content Writer

Ru Chen is a content writer with several years of experience in creating engaging and well-researched articles. She mostly writes about business, digital marketing, and law. In her free time, she can be found watching horror movies and playing board games with her partner in Brooklyn.

Articles by Ru Chen

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