Often, loans have a clear purpose — think home loans, auto loans and student loans. But with a personal loan, the possibilities are more open-ended.

Technically speaking, with a personal loan "you can use the money virtually any way you see fit, from consolidating credit card debt to financing home renovations," said U.S. News & World Report . But because personal loans do have drawbacks and risks, it is an option that you should still be mindful about choosing.

When can a personal loan be a good idea?

In addition to their flexibility and versatility, personal loans offer interest rates that are "often lower than credit card rates, and they provide a predictable monthly payment and fast funding — sometimes the same day you apply," said Bankrate . This can make them a worthwhile

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