You may be able to use the proceeds of a personal loan to pay the debt on multiple credit cards. Here are 5 reasons you might go this route.

5 pros of using a personal loan to pay off credit card debt

1. You can consolidate payments
Managing multiple credit card accounts is hard work. When you’re trying to keep track of too many cards, it’s easy to confuse payment deadlines or accidentally miss them altogether. Paying off multiple credit cards with a personal loan consolidates that debt into one monthly payment, meaning fewer bills to worry about.

2. You could lower your interest rate
There’s no guarantee, but you’ll likely be able to secure a lower interest rate on your personal loan than you were paying on your credit cards. Your interest rate is determined by factors including credit score, debt-to-income ratio, employment status and credit history. Every lender has different borrowing criteria, but generally speaking, a high credit score and a low debt-to-income ratio will help you get a more competitive interest rate.

3. Your monthly payment could go down
If you’re able to secure a lower interest rate on your personal loan, it will likely reduce the amount on your monthly payments. This will allow you to enjoy a little extra room in your budget.

4. You might boost your credit score
If much of your credit portfolio is consumed by revolving accounts, diversifying the mix by taking on a personal loan will likely improve your credit score, according to the credit bureau Experian. Making monthly payments on a timely basis showcases your ability to manage debt responsibly. In most cases, the increase will take time and won’t be monumental, but it’s a step in the right direction.

5. You more likely to pay off debt faster
If you’re making the minimum payment on a substantial credit card balance, you could be stuck with the debt for decades. On the other hand, most debt consolidation loans have a term of 24 to 60 months. This can allow you to pay off the debt in a fraction of the time.

5 cons of using a personal loan to pay off credit card debt

1. You might not qualify for a personal loan
Lenders don’t issue personal loans to just anyone. In most cases, you’ll need a minimum credit score of 525 to even have your loan application considered. Other factors that will be taken into consideration include your debt-to-income ratio, employment status and credit history.

2. You may continue to rack up debt
Technically speaking, paying off your credit card balances with a personal loan frees up space to start racking up charges again. If you don’t completely trust yourself to cut ties with the plastic, it might not be wise to put the temptation out there. After all, debt consolidation is supposed to help improve your finances, not make them worse.

3. You might not get a lower interest rate
Personal loan interest rates are largely based on your credit score. Generally speaking, most rates fall between 5.99% to 35.99%. It’s possible your credit card interest rate will be lower than the rate you’re offered for a personal loan. In this case, it wouldn’t make sense to proceed with debt consolidation.

4. Your monthly payment could increase
You pay for it with interest, but credit cards offer more repayment flexibility than personal loans. Since the latter is typically attached to a repayment period of 24 to 60 months, it’s possible you’ll end up with a higher monthly payment. If you don’t have a lot of extra room in your budget, this could be difficult to handle. The last thing you want is to default on the personal loan that was supposed to be getting you out of debt.

5. The loan might come with fees
Some lenders charge an origination fee, which is tacked on to your personal loan. In most cases, the fee costs 1% to 6% of the total loan amount. For example, if you had a $5,000 loan with a 2% origination fee, you would have to pay $100 upfront. Therefore, it’s possible the personal loan could be more expensive than your credit cards, even if you’re able to secure a lower interest rate.

Shopping around to find the best offer for a personal loan is a must. MagnifyMoney offers a personal loan marketplace that allows you to quickly identify lenders that might meet your needs. You can personalize results by filtering for your credit score, desired loan amount and ZIP code.

What to consider as you review personal loan offers

When comparison shopping for a personal loan, take these key factors into account:

• APR: Personal loan rates typically fall between 5.99% to 35.99%. The rate you’re offered directly impacts your monthly payment and the overall interest you’ll pay on the loan.
• Term length: Most personal loans come with a term length of 24 to 60 months, which is the amount of time you’ll have to pay the balance off in full.
• Fees: Some lenders tack on additional fees to personal loans, including origination fees and prepayment penalties. These can increase the total cost of the loan.
• Loan amount: Personal loans are generally available in sums ranging from $1,000 to $35,000. However, not all lenders are able to approve the amount of money you might need.

APR

5.99%
To
35.99%

Credit Req.

Minimum 500 FICO

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

Varies

SEE OFFERS Secured

on LendingTree’s secure website

LendingTree is our parent company

Taking out a personal loan to pay off credit card balances isn’t the only way to get out of debt.

If you don’t qualify for a personal loan or are unable to find one that meets your needs, here’s a few other options to consider.

1. Balance transfer credit card

A balance transfer allows you to shift your debt from a high interest credit card to one with a more competitive rate if you qualify. Many credit card companies even offer a 0% introductory APR, making it possible for you to pay less interest or none at all for a period of time, so you can pay your balance down faster. The MagnifyMoney balance transfer card marketplace can help you comparison shop to find the right credit card for your needs.

Pros

• If you get a new card with an intro 0% APR and pay it off in full during the promotional period, you can eliminate all interest charges.
• Your new card might have better perks than the old one.
• It might be possible to get a card with $0 intro balance fees, making it possible to save even more money.
• There’s no prepayment penalty.

Cons

• In most cases, you’ll need good or excellent credit — often a 700 minimum credit score — to qualify for the most competitive offers.
• You’re unable to transfer balances between the same credit card issuer.
• Cards often come with a transfer fee, which is usually 3% of the total balance transferred.
• If you don’t pay the balance in full during the introductory period, you could face a higher APR than you were paying on your old card.

2. Home equity line of credit

A home equity line of credit, commonly known as a HELOC, allows you to borrow against the equity in your home. Equity is the difference between what the home is worth and the outstanding debt on it. For example, if your property is valued at $400,000 and you owe $250,000 on your mortgage, you have $150,000 in equity. Most lenders will allow you to borrow up to 85% of the current value of your home.

Pros

• Borrow as much or as little as you need, up to your limit.
• Repay only the amount used.
• Interest rates are typically lower than credit cards and personal loans.

Cons

• Interest rates are generally variable, which could cause your monthly payment to fluctuate.
• You could be subject to annual fees, maintenance fees, transaction fees and closing costs.
• Some lenders have a minimum borrowing or withdrawal amount.
• If you fall behind on payments, you could lose your home.

3. Borrowing from a friend or family member

Nearly three in four Americans have borrowed money from a relative at some point in their lives, according to a survey from LendingTree, which owns MagnifyMoney. Unfortunately, more than one-quarter experienced negative consequences from the transaction. If you take this route, create a contract outlining the loan length, monthly payments and other terms, such as interest.

Pros

• No credit check is involved, which is advantageous if your score isn’t the best.
• If you have to pay interest, you’ll likely get a more competitive rate than would be offered by a traditional lender.
• You won’t have to spend time comparison shopping for loans.

Cons

• Missing payments could permanently damage your bond with a loved one.
• Owing a friend or family member money might change the dynamic of your relationship.
• Tensions could arise if the person needs the money before the expected loan payoff date.

In many cases, using a personal loan to pay off credit card balances is a wise move, but not always. Ask yourself these questions to make sure this it’s the right choice for your unique situation.

The bottom line

Most Americans carrying a credit card balance — 77% — don’t realize they can take out a personal loan to pay down their debt, according to Marcus by Goldman Sachs. This can be a savvy way to get a handle on your credit card debt, and finally pay it off for good. When shopping around for a personal loan, take the time to compare multiple offers and carefully review all terms and conditions, to make sure you’re making the best choice for your finances.

When should you find a personal loan cosigner?

While personal loans offer a smart way to borrow money, not everyone can qualify. Lenders consider your income, employment status, debt-to-income ratio and your credit score before they approve you, which could be a problem if your finances aren’t in the best shape.

If you don’t have the time to improve your credit score before applying for a loan, a personal loan cosigner can help your application. A cosigner agrees to guarantee the loan if you stop making payments. A cosigner could be a family member or a close friend, but it needs to be someone with good credit for them to help you qualify for a loan.

Here are the pros and cons of getting a cosigner for your personal loan:

Pros

• Qualify for a loan when you may otherwise not have been able to
• Get better terms on your personal loan
• Can use the loan to build your credit
• Have someone to hold you accountable, if you’re new to debt

Cons

• Your cosigner’s credit report could take a hit if you miss payments
• If you stop making payments, your cosigner will be equally responsible
• Can strain your relationship if you’re not on top of your loan

Don’t mistake a cosigner for a co-borrower

Before you apply for a personal loan with a cosigner, it’s also important to note the difference between a cosigner and a co-borrower. Where a cosigner lends their good credit to your loan application and guarantees to repay your loan if you do not, a co-borrower is someone who shares in your obligation to repay money you borrow.

If you plan to take out a personal loan with your spouse and you each plan to make payments toward the loan, for example, your spouse would act as a co-borrower and not a cosigner. With that being said, it’s possible you could benefit from having a co-borrower or a cosigner provided the other individual has good credit and the financial means to repay the loan.

7 best personal loans that accept cosigners

A cosigner can help you qualify for a loan you may not be able to get on your own. Fortunately, there are a handful of companies that readily accept loans with more than one applicant or a cosigner who is willing to guarantee the loan.

To help you find the best loan options within this category, we compared lenders based on their interest rates, loan terms, borrowing limits and credit requirements. Here are some of the top personal loans you can get with a cosigner or a joint applicant.

Company

APR

Terms

Min Loan Amount

Max Loan Amount

(271 Reviews)

3.34% - 16.99%

24 to 144

months

$5,000

$100,000

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on LendingTree’s secure website

Advertiser Disclosure.

Your APR may differ based on loan purpose, amount, term, and your credit profile. Rate is quoted with AutoPay discount, which is only available when you select AutoPay prior to loan funding. Rates under the invoicing option are 0.50% higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 3.34% APR with a term of 3 years would result in 36 monthly payments of $292.31.

(3840 Reviews)

6.95% - 35.89%

36 or 60

months

$1,000

$40,000

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on LendingTree’s secure website

Our Commitment We'll receive a referral fee if you click here. This does not impact our rankings or recommendations.

2.90% - 15.99%

12 to 36

months

$3,000

$25,000

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on Backed Personal Loans’s secure website

(2985 Reviews)

16.05% - 35.99%

24 to 60

months

$1,500

$30,000

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

Loan approval and actual loan terms depend on your ability to meet our standard credit criteria (including credit history, income and debts) and the availability of collateral. Loan amounts subject to state specific minimum or maximum size restrictions. Collateral offered must meet our criteria. Active duty military, their spouse or dependents covered by the Military Lending Act may not pledge any vehicle as collateral. CA minimum loan amount is $3,000. GA minimum loan amount is $1,500 for present customers and $3,100 for others.

(262 Reviews)

4.99% - 29.99%

24 to 60

months

$7,500

$40,000

SEE OFFERS Secured

on LendingTree’s secure website

All loans available through FreedomPlus.com are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Eligibility for a loan is not guaranteed. Loans are not available to residents of all states – please call a FreedomPlus representative for further details.

(39 Reviews)

36.00%

12 to 60

months

$1,000

$25,000

SEE OFFERS Secured

on LendingTree’s secure website

6.99% - 14.99%

36 to 84

months

$5,000

$50,000

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

Fixed rates from 6.99% APR to 14.99% APR (with AutoPay). Variable rates from 6.26% APR to 14.10% APR (with AutoPay). SoFi rate ranges are current as of November 30, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. 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, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.26% APR assumes current 1-month LIBOR rate of 2.33% plus 4.175% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.

See Consumer Licenses.

SoFi Personal Loans are not available to residents of MS. Maximum interest rate on loans for residents of AK and WY is 9.99% APR, for residents of IL with loans over $40,000 is 8.99% APR, for residents of TX is 9.99% APR on terms greater than 5 years, for residents of CO, CT, HI, VA, SC is 11.99% APR, and for residents of ME is 12.24% APR. Personal loans not available to residents of MI who already have a student loan with SoFi. Personal Loans minimum loan amount is $5,000. Residents of AZ, MA, and NH have a minimum loan amount of $10,001. Residents of KY have a minimum loan amount of $15,001. Residents of PA have a minimum loan amount of $25,001. Variable rates not available to residents of AK, TX, VA, WY, or for residents of IL for loans greater than $40,000.

Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

1. LightStream

LightStream is a popular online lender that offers personal loans for almost any reason. Their personal loans come with a fixed interest rate, a fixed monthly payment and a fixed repayment timeline that dictates exactly when your loan will be paid off from Day One.

Although LightStream doesn’t list a minimum credit score requirement, they do note that their loans are available for consumers with “good credit.” LightStream also allows people to apply for their loans with a joint applicant. The best part is, LightStream personal loans come with no fees — no origination fee, no application fee and no prepayment penalties for paying off your loan early.

LightStream personal loans may be best for:

• Individuals who have “good credit” or a FICO score of 660 or higher
• Individuals who have a co-borrower whose credit score is 660 or higher
• Anyone who needs to borrow a lot since LightStream personal loans have a higher borrowing limit than some of their competitors

2. LendingClub

LendingClub is another loan company that allows joint applicants to apply for personal loans. Unlike other lenders on this list, however, LendingClub is a peer-to-peer lender that gets its funds from other individuals who agree to invest in the platform.

LendingClub lets consumers borrow up to $40,000 for debt consolidation, home repairs, emergency expenses and many other purposes. Interest rates can be on the low side provided you have good or great credit since the lender’s lowest advertised rates start at 6.95%. However, LendingClub does offer personal loans to borrowers with credit scores as low as 600.

LendingClub also considers applicants with a maximum debt-to-income ratio of 40%, meaning that your monthly debt obligations cannot make up more than 40% of your monthly gross income.

LendingClub personal loans may be best for:

• Borrowers with fair credit who may not be able to qualify for a loan with other lenders
• Anyone who needs to borrow less than $40,000 with a joint borrower
• People who want to borrow from individual investors rather than a traditional bank

3. Backed Personal Loans

Backed Personal Loans is a lender that is actually geared to consumers who need a cosigner to get a personal loan. This company refers to cosigners as “backers,” however, per the company name.

Backed offers special protections for individuals who agree to cosign on their loans. Unlike traditional personal loans that inform cosigners of a default after the fact, Backers personal loans offer the borrower and cosigner a 15-day grace period to keep a loan in good standing once a payment is late. Late fees aren’t charged during this time, and the late payment won’t be reported to credit bureaus until the 15-day period has lapsed. Plus, the cosigner is informed of the late payment right away.

Backers personal loans do charge an origination fee that can be decreased substantially if you fill out your application with additional information and add a qualified cosigner. Backed requires a minimum credit score of 660, and it does exclude borrowers who have recent derogatory marks on their credit reports. Currently, Backed personal loans are only available for individuals who reside in the following states: New York, New Jersey, Florida, Arkansas, Arizona and West Virginia.

Backed personal loans may be best for:

• Individuals who need a cosigner for their loan
• Borrowers who need a personal loan with poor credit
• Anyone who wants their cosigner to have the added protection of a 15-day grace period before a payment is reported late

4. OneMain Financial

OneMain Financial is a personal loan company that offers higher interest rates than some of their competitors. However, OneMain does extend personal loans to borrowers with “fair credit” who may not be able to get a loan elsewhere.

Loan amounts are offered between $1,500 and $30,000 and repayment terms are available for up to five years. OneMain Financial also allows borrowers to apply for a loan with a cosigner, which could help you qualify for a lower interest rate if your credit is poor. It’s important to note, however, that will you will have to visit a physical OneMain Financial branch to close on your loan.

OneMain Financial personal loans may be best for:

• Individuals who need a cosigner for their loan
• People with fair credit who may not qualify for a personal loan with another lender
• Anyone who needs to borrow up to $30,000 and pay it back for up to five years

5. FreedomPlus

FreedomPlus is another personal loan company that focus on borrowers with less-than-stellar credit. Loan amounts are offered up to $40,000 and you can repay for up to five years. FreedomPlus does charge an origination fee from 0.00% - 5.00% of your loan amount, but they don’t charge any penalties if you pay your loan off early.

While FreedomPlus doesn’t list an exact minimum credit score to qualify, they do list a maximum debt-to-income ratio of 40%. FreedomPlus also allows co-borrowers on their loan applications, which can make it easier to qualify if you do not have the income or credit to qualify on your own.

FreedomPlus personal loans may be best for:

• Individuals with fair credit who have a co-borrower to apply with
• Anyone who needs to borrow up to $40,000 for nearly any reason
• Someone who can’t qualify for a personal loan without any fees

6. Mariner Finance

Mariner Finance is another personal loan company that allows individuals to apply for a personal loan with a cosigner. This company does offer interest rates as high as 36.00% depending on your creditworthiness, but they do not list a minimum credit score to qualify. For that reason, Mariner Finance may be a good option for consumers who may need to pay a higher interest rate due to credit mistakes they’ve made in the past.

While Mariner Finance does have looser requirements to qualify for their loans, it’s important to note that they only operate in 22 states: Alabama, Delaware, Florida, Georgia, Indiana, Illinois, Kentucky, Louisiana, Maryland, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia and Wisconsin. Fees can vary on personal loans from Mariner Finance as well, so make sure to read the fine print and understand all fees before you move forward with one of their loan options.

Mariner Finance personal loans may be best for:

• Individuals who need a cosigner for their personal loan
• Anyone with less-than-stellar credit who can’t get a loan with another company
• People who need to borrow up to $25,000; however, note that loans greater than $7,000 or less than $1,500 need to be funded at a physical branch

7. SoFi

While SoFi is mostly known for their private student loans and student loan refinancing options, this company also offers personal loans. SoFi personal loans are available for people in every state except for Mississippi, and they allow co-borrowers on the same loan application.

One big benefit of personal loans from SoFi is their lack of fees. This company doesn’t charge an origination fee for their personal loans, nor do they charge prepayment fees or late fees. SoFi even has a program that allows you to pause your loan payments if you lose your job. The best part is, SoFi makes it possible to see if you could get approved for a loan without a hard inquiry on your credit report.

SoFi personal loans may be best for:

• People with good credit who want to apply with a co-borrower
• Anyone who needs to borrow a lot since personal loans amounts go up to $50,000
• People who want a personal loan without any fees

Conclusion

If you need a personal loan with a cosigner or a co-borrower, make sure to check out all the companies on this list. While we included some lenders that charge higher interest rates and fees, our list of top lenders for personal loans with a cosigners was created to include options that could work for borrowers with all credit ratings and financial situations.

As you compare loan options, make sure to read the fine print and compare loan terms, interest rates and fees. With enough research, you’ll have the best shot at finding a personal loan that meets your needs — with or without a cosigner.

A personal loan can provide you with a lump sum chunk of change to help you finance the cost of a patent. The pros of using a personal loan to finance a patent are obvious: “You will have the money up front to hire a registered patent attorney to draft a thorough patent application,” according to Kelly.

However, personal loans often come with higher interest rates compared to other types of loans, so if you are short on cash now, consider how you are going to be able to pay this loan back later. As Kelly noted, “the cons are that now you have this note that you have to pay at some point, and you need to be able, as a business person, to figure out how you’re going to monetize the invention to pay the money back.”

If you want to use a personal loan to finance a patent, Kelly suggests starting by creating a business plan. Then, do some research on potential lenders.

The process for obtaining a patent starts with an application that will be submitted to the United States Patent and Trademark Office (USPTO). “This is a legal document that combines patent law with an explanation of the technology underlying the invention,” Kelly says. “It’s one of the most complex legal documents that we have in the United States.”

The type of patent application you’ll need depends on the product you’ve invented. There are three types of patents: design, utility and plant.

As Kelly explained, the design patent protects the ornamental aspects of your product. “For example, the bug-eyed headlights on a Porsche 911 are covered by a design patent,” he said. “The same with the BMW kidney-shaped grill and the unique shape of a Heineken beer bottle.”

Compare that to a utility patent, which protects the functional aspect of an invention, or how that technology is used; as an example, Kelly noted, “On an iPhone, the round button that you press to use your phone is protected by a utility patent.”

The third patent is for those who create new plant varieties — say, a new corn or soybean seed.

Filling out a patent application

According to Kelly, each patent application requires several components: a description of the problem that the inventor was attempting to solve and the failed solutions to that problem; a description of how the inventor solved the problem and descriptions of the invention itself. The application also requires properly labeled and described drawings.

“Most importantly,” according to Kelly, “at the back of the patent application is the claim, a long run-on sentence which describes the invention.” Kelly also urges every entrepreneur to hire a registered patent attorney to complete the application: “The claim determines the scope of the patent rights that are afforded to the inventor. It takes a very skilled draftsperson to write a patent claim appropriately.”

Once your application is complete, it is filed with the patent office, along with the requisite fees. Then, Kelly says, a patent examiner who has the technical background that matches your invention reviews your application.

Your cost for a patent

Speaking of fees, a patent application can start at just a few hundred dollars, but the investment often comes with a hefty price tag. According to Kelly, entrepreneurs should plan on spending between $7,000 and $15,000 to prepare and file a patent application, which includes the services of a registered patent attorney.

“The fees also range based on the complexity of the invention,” he said. “If you need to hire a registered patent attorney who has a Ph.D in biochemistry, because your application deals with recombinant DNA technology, that’s going to be more expensive.”

Compare that to someone who has just designed a new cardboard coffee cup — according to Kelly, “that invention is pretty low technology and wouldn’t require as much time to put together the patent application.”

Applications can be five pages long or 200 pages long, depending on the invention and complexity of the technology.

“The Patent Office is one of the few administrative agencies of offices in the U.S. government which makes money,” said Kelly, “and that’s because there’s a fee for filing a patent application, a fee for asking for a once-a-year examination process, and even a fee for not meeting deadlines that the examiner will set to the inventor.

When it is time to award the patent, there is a issuance fee and there are maintenance fees so that the patent office will continue to recognize that patent as valid and enforceable.”

Beware submitting a patent application on your own

You can submit a patent application on your own, but this is the riskiest of all of your options. According to Kelly, if you want to do it yourself, you must have a strong familiarity with patent laws and the procedures of the Patent Office, and your application must comply with those procedures and laws. Unless you have a legal and patent background, it’s better to leave this tricky process to the pros.

Remember: You can’t patent an idea, just your actual invention, but maybe you don’t even need a patent for that either.

“If you discover or create an invention, you need to make a strategic decision as to whether you disclose that invention to the world or whether you keep it secret,” said Kelly. “It could be considered a trade secret, such as the formula for Coca Cola or the recipe for Kentucky Fried Chicken. You can derive proprietary value from a trade secret.”

However, Kelly noted that if the invention can easily be reverse engineered, then patent protection is a must.

The patent application process can take anywhere from one to three years. Once you apply for your patent, you can mark your product “patent pending” and continue to sell it (and hopefully make money) while you wait for an answer.

“The patent pending designation is important for calculating damages later if you sue an infringer, and if you’re successful proving infringement,” said Kelly.

A patent application takes money and time, but it ultimately protects the one thing you have been working on for a long time — your invention.

Fees mentioned above are accurate as of the date of publishing.

Traditional banks

At one time, brick-and-mortar banks might have been your best option for a personal loan. But nowadays, you may find that your local bank isn’t a competitive option. Why? Because banks with physical branches have higher overhead costs than online lenders — and they’re still trying to make a profit off your loan. Still, they can be a convenient option.

Pros

• Can visit your local branch to learn more and apply
• Likely a trusted and known brand

Cons

• Higher fees
• May have stricter loan requirements

Credit unions

Because credit unions aren’t trying to profit off your loan, they can generally offer lower interest rates on their personal loans. But to get a personal loan through a credit union, you have to become a member first — and you won’t qualify for membership at every credit union.

Pros

• Lower fees
• May have lower loan requirements

Cons

• Have to become a member before applying
• Fewer locations compared to a big bank

Online lenders

Online lenders don’t have brick-and-mortar locations. That could be a good thing or a bad thing depending on your needs. But with fewer overhead costs, online lenders are competitive options for personal loans.

Pros

• Competitive rates and terms
• Easier to research, plus streamlined application processes

Cons

• Little name recognition can make them hard to find
• No physical locations for in-person aid

P2P lenders

P2P lending is what it sounds like: Instead of going to a bank, borrowers receive their loans from their peers who they are connected to through a platform. Since P2P lending is only online, overhead costs are low and customers get lower interest rates. A personal loan through P2P lending comes with some cons, such as an origination fee, which is deducted from the total loan amount before the borrower gets their lump sum. Also, loans are not available in all states, and they can depend on debt-to-income ratio, financial history and career experience. They are generally limited to borrowers with above-average credit and income levels.

Pros

• Can share your story if you’re struggling to qualify
• Work with people rather than companies

Cons

• Likely to receive high rates
• Harder to qualify for a loan

Does your insurance cover repairs?

You won’t know if you need a loan for car repair until you find out if you’re on the hook for repairs. If your vehicle is under warranty, the repairs could be covered, and if you were involved in an accident, the other party might be at fault.

If you’re not sure if your car is under warranty, CarsDirect recommends finding the vehicle identification number, or VIN, and contacting your local dealership. If they are unable to assist, the site recommends searching for your vehicle history report on Carfax.

In the case of a car accident, Esurance notes that auto insurance is fault-based in most states. Therefore, if you weren’t at fault, the other driver’s insurance company will likely help pay for your car repairs, medical expenses and other costs. If you live in a no-fault state, you might still qualify for assistance with car repairs, so check with your insurer.

Researching pricing and auto body shops

You might not even need a car repair loan — or you can at least reduce the size — if you’re able to score the best possible deal on repairs. If you were in an accident, your insurance company will likely recommend an auto body shop. But you ultimately have the final say on where the repairs are made, according to the National Association of Insurance Commissioners.

It’s also wise to shop around and gather quotes from several auto professionals, to be sure you’re getting the best price. When looking for a repair shop, the Federal Trade Commission advises:

• Asking family members and friends for recommendations
• Checking to see if the business is licensed (when required by state or local law)
• Making sure your vehicle warranty will be honored at the shop

If you’re really trying to avoid car repair loans, you might consider taking your vehicle to an auto mechanic school. Of course, this can be a risky move, as technicians are still students. Before turning your car over to the school, check into liability issues, in case the problems aren’t fixed or new ones are created.

Where to find car repair loans

If you need a car repair loan to get back on the road, a personal loan might be the answer. This type of loan requires no collateral, so you won’t have to pledge assets like your home or car to secure financing. Most personal loans have a fixed-interest rate and a term ranging from one to five years, allowing you to choose an option that fits your budget.

LendingTree offers a personal loan tool that may help you find and compare personal loans from lenders. You’ll fill in basic information about yourself and what you’re seeking in a loan. Then, you may be provided with loans to consider from up to five different lenders.

APR

5.99%
To
35.99%

Credit Req.

Minimum 500 FICO

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

Varies

SEE OFFERS Secured

on LendingTree’s secure website

LendingTree is our parent company

To kickstart your search for car repair loans, consider these personal loans offered by lenders in the MagnifyMoney personal loan marketplace.

Personal loans

“A personal loan has a fairly reasonable interest rate when you compare them to other non-asset based borrowing like credit cards, so they are actually not a bad deal, as long as you have decent credit and shop around for the best interest rates,” said Lucas Casarez, CFP and founder of Level up Financial Planning, LLC, a virtual fee-only financial planning firm based in Fort Collins, Colo.

Casarez also warned against seeking nontraditional financing, such as working with a pawn shop or a payday lender.

“The interest rates associated with those types of lenders is eye-popping and to be avoided at all cost(s),” Casarez said.

If you decide to take this route, Jayson Owens, CFP and financial advisor at Bright Road Wealth Management, a fee-only independent investment advisor with offices in Anchorage, Alaska, and Tacoma, Wash., emphasized the importance of making sure you can afford the payment.

“Another common problem is when people don’t compare the alternatives, assuming their primary bank will give them the best rate,” Owens said. “This is almost never the case.”

The long and short of getting a loan for car repairs

Getting car repairs in a timely manner can be a matter of life or death because it’s unsafe to drive a vehicle that isn’t functioning properly. Taking out a loan for a car repair can allow you to get issues fixed without delay. If you choose this route, always look for ways to save money on repairs.

And if you decide to take out a loan for repairs, be sure to compare lenders to get the best deal possible.

This article contains links to LendingTree, which is our parent company.