While a personal loan can help pay for many expenses, it’s not always the best option. Examples of situations where a personal loan typically isn’t the most appropriate choice include: Paying for college tuition: If you need loans to pay for college tuition, it makes more sense to apply for government or private student loans. Covering vacation costs: It’s better to save enough money for a vacation before taking your trip. You don’t want to incur debt for a vacation, no matter how low the interest rate attached to it may be. Funding a major home remodeling project: Large remodeling projects tend to get more expensive as contractors work, meaning you might need the flexibility of a home equity line of credit to cover these rising costs.