More Americans are taking out personal loans. Financial media wants you to know when this might be a good idea. Spoiler: it's never a good idea but they wrote the article anyway because someone has to justify the ad spend from LendingTree.
The logic works like this. Borrow money at 12% to pay off money you borrowed at 18%. Congratulations. You just refinanced your way to being slightly less f*cked. This is what passes for financial strategy in 2026. Moving deck chairs on the Titanic but the chairs have adjustable rate mortgages.
Three scenarios where a personal loan makes sense according to experts who get paid to say personal loans make sense. Consolidating debt. Covering a major expense. Presumably a third reason exists but I got bored reading.
Debt consolidation is my favorite. You took out five loans you couldn't afford so the solution is a sixth loan you also can't afford but this one has a better website. The interest rate is lower which means you'll be in debt longer but you'll feel smarter about it. That's worth something.
Covering a major expense is code for I didn't save money so now I'm renting money from a bank at interest rates that would make a loan shark blush. But it's fine because the expense was major. Not minor. Major. That makes it responsible.
The personal loan industry exists because Americans are very good at spending money they don't have and very bad at remembering they did that. It's a business model built on the foundation of financial amnesia and optimism bias. Both renewable resources.
Here's how to know if you should take out a personal loan: you shouldn't. There's your article. I just saved you twelve paragraphs of sponsored content disguised as advice.
Photo by Etienne Girardet on Unsplash
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