Big goals don’t always fit neatly into your monthly budget. Maybe you’re ready to remodel your kitchen, take that dream vacation or finally plan the wedding you’ve been imagining. Or maybe life surprised you with a car repair or medical bill you weren’t expecting. That’s where borrowing—smartly—can help.
Personal loans and personal lines of credit (PLOCs) give you access to funds without tying the money to a specific purchase. Unlike a mortgage or auto loan, these options don’t require collateral, which makes them flexible tools for all kinds of needs. Because they're unsecured (opens in a new tab), rates may be slightly higher, but both are based on your creditworthiness—your income, credit score and repayment history all play a role.
Understanding how each works can help you choose the right fit.
What Is a Personal Loan?
A personal loan is money you borrow from a financial institution with a fixed interest rate, meaning it won't change along the way. You repay it in predictable monthly payments until the balance and interest are fully paid off. With a personal loan, you get the money in a lump sum. Need more? You’d have to apply for another loan.
You can use a personal loan to pay for a variety of things. One of the most popular uses? Debt consolidation. Rolling multiple bills into one monthly payment can simplify your finances and potentially save you money over time.
With a personal loan, you know exactly:
How much you’re borrowing
What your monthly payment will be
When the loan will be paid off
We offer loan terms ranging from 12 to 180 months* and highly competitive interest rates. If you decide to pay extra toward your balance, many lenders (including us) won’t charge you a prepayment penalty. That helps you pay off your loan faster and save even more on interest. Before approval, a lender will look at things like your credit score, debt and income. If your credit profile needs improvement, you may not qualify for a loan.
What Is a Personal Line of Credit?
A PLOC works more like a credit card. Instead of loan funds being disbursed all at once, you get access to revolving credit. You can borrow what you need—when you need it—up to your limit.
For example, if you’re approved for a $10,000 PLOC, you can withdraw any amount (say $500 or $2,000), repay it and then borrow again. You only make payments on the money you actually borrow. It’s flexible, convenient and great for expenses that come in stages.
PLOCs often come with variable interest rates, which means your rate can change. One perk? You can use your PLOC as overdraft protection, giving you added security and peace of mind.
When to Get a Personal Loan vs. Personal Line of Credit
Whether you should apply for a personal loan or a personal line of credit depends on your specific circumstances.
If you know exactly how much you need up front, a personal loan is often the better choice. It’s ideal for one-time expenses like consolidating debt, buying furniture or purchasing large appliances. You get a lump sum, then repay it in fixed monthly payments—simple and predictable.
On the other hand, if you’re tackling a larger project or expense with costs that may change along the way, a PLOC gives more flexibility. It lets you borrow only what you need and repay as you go. This makes it perfect for home renovations, weddings or vacations where costs might come in phases or adjustments may be needed along the way.
How to Qualify
Whether you choose a personal loan or PLOC, lenders typically consider:
Credit score: This helps lenders understand your borrowing history and is often a major factor in qualifying for lower rates.
Debt-to-income (DTI) ratio: Lenders want to confirm that you can manage your loan repayment along with your other financial obligations.
Repayment history: This shows how consistently you’ve made on-time payments in the past. At Members 1st, all you need to do is submit your application, and we'll reach out if we need additional documents.
If approved, we’ll let you know your rate, amount and terms.
*Sample terms: If you borrow $10,000 at 10.39% APR for a 3-year term, your estimated monthly payment may be $324.51.
