7 Smart Ways to Use a Personal Loan You Haven’t Thought Of

My cousin Mehul took a ₹3 lakh personal loan. Like everyone, you might have assumed it was for a wedding or medical bill. But he used it to buy discounted raw material in bulk, and he saved ₹70,000 in just six months!

The table summarises his approach.
 

Most people take personal loans for emergencies, weddings, or debt payoffs. But what if we told you they could actually help you grow your money, cut expenses, or even improve future finances?

In this guide, we’ll explore 7 surprisingly smart ways to use a personal loan. 

1. Pay Off High-Interest Credit Card Debt

Ravi had ₹2.2 lakh in credit card debt at 36% interest, paying nearly ₹6,600 monthly in just interest. He took a personal loan of ₹2.2 lakh at 11.5% for 2 years. His EMI reduced to ₹10,369 and saved over ₹32,000 a year in interest alone.

But what if he continued using his credit card? Let’s see his finances for both situations in the table below.
 

2. Finance Home Renovations Without Collateral

Meera wanted to redo her living room and kitchen, but didn’t want to use her savings. She took a ₹3 lakh personal loan at 12% for 3 years. She paid ₹9,961 monthly EMIs and completed all work at once. That mind of hers increased her home’s value by ₹5 lakh.

Read More – Creative Ways People Are Using Personal Loans in 2025

Let’s see how you can earn profits by renovating your home.
 

3. Invest in Upskilling or Certification Courses

Vikram took a ₹4.5 lakh personal loan for a 6-month certified data science program. He paid ₹14,982 EMI for 36 months. Post-certification, his salary went from ₹4.2 lakh/year to ₹9.6 lakh/year. This helped him repay his loan in 2 years instead of 3.

Now, that is a story worth studying with the table below.
 

4. Handle Sudden Medical Emergencies

Shruti’s father required an urgent angioplasty costing ₹1.8 lakh. Without insurance coverage, she took a personal loan of ₹2 lakh at 13.5% for 2 years. Her EMI was ₹9,608. The funds ensured immediate surgery and saved her from withdrawing ₹1.5 lakh from her emergency fund.

This is how a personal loan saved someone’s life.
 

5. Fund a One-Time Family Vacation or Event

Ramesh wanted a once-in-a-lifetime Europe trip with his parents. The total cost was ₹2.4 lakh. He took a personal loan for 2 years at 12%. His EMI was ₹11,294. He easily paid them without breaking his monthly flow. He avoided using high-interest credit cards abroad.

Also Read - 10 Smart Ways to Use a Personal Loan to Build Wealth

Let’s see how it turned out for him in the table below.
 

6. Launch a Small Business or Side Hustle

Neha took a ₹5.5 lakh personal loan to open a small boutique from her garage. Her 3-year loan had a 13% interest rate, with ₹18,600 EMIs. Within 14 months, she started earning ₹1.2 lakh monthly. This covered all the EMI and grew a steady profit of ₹35,000 per month.

Let’s see her growth with the help os the table given below.
 

7. Build a Strong Credit Score with Timely EMI Payments

Amit’s credit score was stuck at 665. So, he was not able to access home loans. He took a ₹1.8 lakh personal loan for 2 years at 11.9% and paid all EMIs on time. After 24 months, his credit score rose to 763. He saved ₹2.2 lakh on his future home loan

Let’s compare his pre- and post-loan situations with the table below. 
 

Conclusion

‘Abhi to samajh gaye honge!’ You should take personal loans for emergencies. But invest that money in such a way that reduces interest costs, increases career growth, or even improves your credit score. Use them wisely and make them powerful tools. 

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About the Author

LoansJagat Team

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?