Good reasons to borrow money involve urgent, essential, or investment-oriented needs, such as emergency car or home repairs, unexpected medical bills, or debt consolidation. Other responsible reasons include financing education, moving expenses, or necessary, high-ticket purchases. These excuses work because they show lenders or individuals that the funds are for unavoidable situations.
10 reasons for personal loans
When to borrow money? Here are 7 good reasons
When asking to borrow money, it's important to be respectful and clear. You could say something like, ``Hey (Name), I'm facing a financial challenge right now, and I was wondering if it's possible to borrow some money temporarily. I'll make sure to pay you back by (specific date).
Unexpected medical bills or urgent home or car repairs that must be paid immediately could be a reason to seek a cash advance. Emergencies such as funerary expenses or other unexpected expenses where you can't wait until the next pay-check.
6 reasons to apply for a personal loan
You Need Extra Cash To Cover Something Planned
These are all sound reasons to withdraw the funds. Say you've been saving up for a down payment and are ready to close on your new home — that's a good time to draw from your savings.
"I forgot to pay that bill again."
If you mention that a few bills slip your mind here and there, it may create some concern. Even if you don't say anything, those bills will show up on your credit report. This is a fast-track to getting your loan denied.
So here are four essential steps to successfully making a financial ask.
Be Clear and Honest About Your Request
If you're asking for money, be upfront about how much you need and how much you're willing to repay at specific intervals. This builds rapport with the person you want to borrow from and validates how much assistance is needed.
Borrowing money to make ends meet is also a red flag. These are signs that your partner is not fiscally responsible, and this can land you both in hot water down the road. The feeling of being financially out of control often leads people to hide aspects of their financial lives.
One way to look at this is by becoming familiar with the “Five C's of Credit” (character, capacity, capital, conditions, and collateral.) This general framework will help you better understand what information is needed to provide a positive outcome to your lending request.
Here's how to do it:
Paying for an emergency – car or boiler broken down again? Get it fixed by taking out a personal loan. Funding education – while a student loan is the best option for financing higher education, you may be able to get a personal loan to help cover living expenses or extra tuition costs.
The 3 C's of credit—character, capacity, and collateral—are a widely-used framework for evaluating potential borrowers' creditworthiness.
Those with a 640 or higher credit score are likely to find a number of options for a $10,000 personal loan; those with higher scores may have more options as well as more favorable terms.
“Typically, the biggest reasons people withdraw their savings are to cover a bill, to make a purchase, home repairs, for vacations or for birthdays and holidays such as Christmas,” said Arielle Torres, an assistant branch manager at Addition Financial Credit Union. These are all sound reasons to withdraw the funds.
In any case, cash is not going to disappear from the scene in the US anytime soon. The US government is responding to the growing trend toward online payments with the Payment Choice Act of 2025, which is intended to secure consumers' right to pay with cash in brick-and-mortar stores.