What Is a Nonpurpose Loan?

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How Do Nonpurpose Loans Work?
Example of a Nonpurpose Loan
Purpose vs Nonpurpose Loan: Similarities and Differences
Which Is Better?
Borrowers can get an unsecured personal loan with no collateral Expecting mothers can use personal loans as a maternity leave loan The purpose of a personal loan is determined by the borrower’s personal discretion
Pros & Cons of Nonpurpose Loans
The Pros of Nonpurpose Loans
Flexibility
Interest
Securities as Collateral
Cons of Nonpurpose Loans
Volatility
Additional Collateral
Restricted Funds
Alternatives for Nonpurpose Loans
Credit Cards
Personal Loans
The Takeaway
Frequently Asked Questions
Photo credit: iStock/Six_Characters
LCPL-Q224-1911399-V1
About the Author
Sulaiman Abdur-Rahman writes about personal loans, auto loans, student loans, and other personal finance topics for Lantern. He’s the recipient of more than 10 journalism awards and served as a New Jersey Society of Professional Journalists board member. An alumnus of the Philadelphia-based Temple University, Abdur-Rahman is a strong advocate of the First Amendment and freedom of speech.
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