Log In Log In Log In Apply now

58% of people would rather go to the dentist than take out a loan

Back to financial educationLoans

Illustration of three people cleaning a giant tooth sculptor, which many think is preferable to getting a loan

More than half the people in a recent survey—58 percent—told us they’d rather go to the dentist than take out a loan. But getting a personal loan is a lot easier than you might think.

Key takeaways:

  • A personal loan is often a great option if you need money fast. Personal loans can help you build credit, can be less stressful than borrowing from a friend or family member, and may have lower interest rates than credit cards.
  • Getting a personal loan is a simple, straightforward process. Once you’ve chosen a loan company, all you have to do is fill out an application and wait to hear if you’re approved. If you agree to the loan terms, you make regular payments each month until the loan and the interest are paid back.
  • Until you sign a loan agreement, you’re free to change your mind at any time. A reputable lender will not push you into a loan agreement.


Below, we’ll go through the basics of the lending process. We’ll also look at some reasons you might hesitate to apply for a personal loan.

Here’s what we’re going to cover:

  • Getting money for unexpected expenses
  • Benefits of personal loans
  • Common concerns about personal loans
  • Oportun: Affordable, pain-free personal loans

Getting money for unexpected expenses

We asked the people in our survey what they do when they need money in a hurry. Most of them said that they:

  • Take money from savings (19 percent)
  • Borrow from a friend or family member (14 percent)
  • Sell their personal property (18.6 percent)
  • Start a side hustle (8.6 percent)

Taking out a loan may not be your first choice. But did you know that there are many benefits to personal loans?

Benefits of personal loans

A personal loan can be the best option if you need money for large or unexpected expenses, such as medical bills or home repairs. Here are some reasons why:

Less stress

When you need money in a hurry, you could always take it from your savings account. But what if you don’t have enough money saved to cover your expenses?

If you ask a friend or family member to lend you money, you may find yourself feeling awkward with them. This is especially true if it takes a long time to pay them back. Personal loans give you access to money without causing stress in your relationships.

You could also try starting a side hustle or selling personal property to raise money. But starting a side hustle takes time and a lot of work. And parting with belongings that are valuable to you can be painful. A personal loan doesn’t require you to wait or give up your possessions.

Lower interest rates

Sometimes people prefer to use credit cards for big expenses. According to our survey, 52 percent of respondents said they are familiar with credit cards, while only 35% were familiar with personal loans. Credit cards typically have higher interest rates than personal loans. This can end up costing you more money if you carry a balance or miss a payment.  However, you don’t pay finance charges on new purchases made with your credit card if you pay off your full credit card balance each month.

What is an interest rate?

The interest rate is a percentage of the total loan amount or credit card balance that you pay your lender for borrowing money. This is in addition to paying back the original loan amount or credit card balance, along with any fees.

Improved credit

Personal loans have another big advantage: They give you a chance to build credit. When you make your payments on time and in full to a lender that reports to the national credit reporting agencies, your credit score is positively impacted.

By building a positive credit history and improving your credit score, you may qualify for better financial opportunities in the future, like lower interest rates and better loan terms.

What’s the difference between credit score and credit history?

Your credit score is a number between 300 and 850 that gives lenders an idea of how likely you are to make payments on time. The higher the number, the better your credit score.

Your credit history makes up your credit report and is used to calculate your credit score. It contains information about your credit activity, including what credit accounts you have open, what balances you owe, and your payment history.

Common concerns about personal loans

Next we’ll look at some of the reasons you might feel uncomfortable about taking out a personal loan. The good news is that these concerns don’t have to stop you from getting an affordable loan. Here’s why.

I’m not familiar with personal loans

If you don’t know much about personal loans, it makes sense that you would avoid them. Fortunately, getting a personal loan is a simple, straightforward process. Once you’ve chosen a lender, all you have to do is fill out an application and wait to hear if you’re approved. Some lenders may give you an answer within a few minutes.

If your application is approved, you can sign a loan agreement and sometimes get your money in as little as two hours. You can then use the money to pay for a variety of personal expenses like home improvements, car repairs, medical emergencies, or even a family vacation. Then you make regular payments until the total amount due is paid back.

I don’t know how to apply for a loan

Many people in our survey said they didn’t know how to apply for personal loans. Some said they thought it was “nearly impossible” to get a personal loan.

But it’s not as difficult as you might think. Once you’ve found the right lender, all you need to do is:

  • Fill out some basic information to see if you prequalify
  • Gather and submit the documents the lender requests
  • Finish and submit your loan application
  • Upon approval, sign the loan documents and get your money

Each lender’s application process may be a little different, but the basic steps are the same with all lenders.

I don’t have enough income

Some people avoid personal loans because they believe their income is too low to let them qualify.

Even with a low income, you may still be able to get a small personal loan. This can be a good way to start. With a smaller loan, you’ll be more likely to have manageable payments that you can make on time, which builds your credit history.

The key is choosing a lender who will work with you to find a loan that fits your budget. To do this, some lenders consider your ability to repay the loan by looking at your debt-to-income ratio.

I already have debt

Other people worry that they already have too much debt to qualify for a personal loan. Lenders decide this by looking at your debt-to-income ratio. This is the total of your monthly debt payments divided by your monthly income.

For example:

Suppose your monthly income is $1,500 and you owe debt payments of $500 each month.

$500 (monthly debt payments) ÷ $1,500 (monthly income) = 33 percent (debt-to-income ratio)

This number helps lenders understand if you can afford another debt payment. To qualify for a personal loan, it helps to have a debt-to-income ratio of 43 percent or less.

I don’t have a credit history

Your credit score and credit history are important factors when you apply for a personal loan. Lenders may turn you down if you have a low credit score.

But what if you don’t have any credit history at all? Don’t worry—you’re not alone. Over 100 million people in the United States have no credit history.

There are many reasons you might be in this situation. Maybe you’re still young and haven’t had time to establish a credit history. Maybe you recently moved to the United States. Or maybe you just prefer to pay bills with cash or debit cards rather than using credit.

Regardless of the reason, there are options out there for you. Some lenders, like Oportun, specialize in providing loans for people who have limited or no credit history.

I don’t trust lenders

Finding a lender you can trust is extremely important. Some people are afraid that lenders will take advantage of them, or that they will be scammed if they apply for a personal loan.

It’s smart to be careful about who you trust—especially where money is involved. Here are some warning signs that a lender may not be trustworthy:

  • They “guarantee” that you’ll get approved for a loan
  • They ask you to pay to apply
  • They don’t have any good reviews online
  • They don’t have any physical offices or an established online presence
  • They don’t have a secure website (a secure site uses “https” instead of “http” at the beginning of the web address)
  • They pressure you to apply or sign an agreement

If a lender does any of these things, it’s a good idea to look elsewhere for your personal loan.

What if I change my mind?

Even after a lender you trust has approved you for a loan, you don’t necessarily have to accept their offer. Before you decide, you’ll want to review the loan agreement in detail and make sure all your questions have been answered.

If you don’t feel comfortable with the loan terms, such as the payment schedule, you don’t have to sign anything. You can always tell the lender about your concerns and ask whether they can find another solution for you. You can also apply to a different lender to see if their terms are more favorable.

Remember that you’re in charge here: You don’t have to consent to anything you don’t feel good about. Until you sign a loan agreement, you’re free to change your mind at any time. A reputable lender will not push you into a loan agreement.

Oportun: Affordable, pain-free personal loans

A personal loan can be a safe, easy option when you need money for an unexpected bill or a big purchase.

At Oportun, we’ll walk you through each step of the lending process. We’re here to answer your questions and listen to your concerns. We want you to have a positive experience with your personal loan.

We believe everyone deserves a chance to create a better financial future. Find out if you prequalify for a loan by applying online or visiting one of our hundreds of locations across the country.

At Oportun, our team will work with you to find a loan that fits your needs. Reach out to us today.


Investopedia. When are personal loans a good idea?
The Balance. How to avoid shady lenders online
Experian. Can I trust online personal loan lenders?
Consumer Financial Protection Bureau. What is a debt-to-income ratio? Why is the 43% debt-to-income ratio important?
Consumer Financial Protection Bureau. Data point: Credit invisibles


The information in this site, including any third-party content and opinions, is for educational purposes only and should not be relied upon as legal, tax, or financial advice or to indicate the availability or suitability of any Oportun product or service to your unique circumstances. Contact your independent financial advisor for advice on your personal situation.

Personal loans through Oportun subject to credit approval. Terms may vary by applicant and state and are subject to change. If you refinance, you may pay interest over a longer period of time or at a higher rate and the overall cost of your loan may be higher. Loans in CA, ID, MO, NM and WI are originated by Oportun, Inc. California loans made pursuant to a California Financing Law license. NV loans originated by Oportun, LLC. In AL, AK, AR, AZ, DE, FL, GA, HI, IL, IN, KS, KY, LA, MI, MN, MS, MT, NC, ND, NE, NH, NJ, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA and WY loans are originated by Pathward®, N.A.. Terms, conditions, and state restrictions apply.

Ready to build a better future? Apply now.

Personal loans

You might also like

Paying off debt: the snowball method How does cosigning work? What is secured debt? Lending scams: Four things to look out for What do you need to get a personal loan? What is a personal loan and how do personal loans work? How to budget money on a low income What is investing? Tips and tricks for paying off credit card debt

Ready to build a better future? Apply now.

Personal loans Credit cards

We use cookies to bring you the best experience on our site. We never sell your information to third parties. When you use our site, you agree to our cookies policy. Find out more.