Dr. James Kahn (photo courtesy of Wallethub)

In ’s recent review of “2021’s Best Personal Loans,” Dr. James Kahn, Henry and Bertha Kressel University Professor of Economics and chair, Department of Economics at , was one of several experts asked for their insights about how Americans can manage their money better. Here is :

What advice do you have for someone trying to find the best personal loans for their needs?

It is best to take out loans for one-time expenses, like a car, major appliance, or home, not for recurring expenses. And while student loans are often at reasonable rates, it is very easy to get over one’s head. You must be honest with yourself and know that you are disciplined enough, and have enough income, to make the payments and pay down the loan on schedule.  

What are some of the common characteristics that the best personal loans share?

Secured loans like car loans or mortgages are at much cheaper rates than unsecured loans like credit card debt. One can also sometimes get loans at low rates from appliance dealers. The loans should have scheduled payments that pay off the principal in a finite period.  

What do you think of the opinion that not having a personal loan is the best personal loan?

It depends on the person. If you have a steady income and are taking out a loan for a clear purpose, and can pay it off over time, personal loans can be a useful temporary expedient. But it is usually preferable to pay cash if possible and to save up for unexpected expenses rather than leave yourself in a position where you need to borrow.