Father and young child doing laundry
Father and young child doing laundry

3 ways you can use a hybrid loan

Whether you're consolidating debt or tackling your home repair to-do list, you may need more money than you have on hand.

Let's say you decide to upgrade your washer and dryer as you update your laundry room. Could you make it happen on the spot? Or would having additional money on hand to draw from for occasional expenses, give you more peace of mind financially? If you're thinking it may be nice to have additional money available, then a hybrid loan might be the right loan for you.

A hybrid loan is a type of personal loan. You get approved for a set amount of money, but rather than receiving the total amount all at once, you can take only how much you need when you need it, for a set amount of time, typically six months, with interest-only payments due monthly. This set amount of time is called the draw period. Once the draw period ends, the hybrid loan converts to a more traditional style loan which is typically a 60-month repayment term with a fixed interest rate which requires principal and interest payments monthly. This gives you flexibility to pay off the balance over a few years.

Looking for a real-life example of a hybrid loan? Learn more about the f1RST Quick Loan from First Finanical Bank.

  • A hybrid loan has similarities with both credit cards and traditional personal loans, but in some cases, they combine the best of both worlds. Hybrid loans and credit cards have different uses. A credit card is typically used for smaller purchases, and borrowers are provided with much smaller credit limits, which are to be paid off every month.
  • A hybrid loan allows for the borrowing of larger sums of money over the draw period and provides the opportunity to repay the amount borrowed at a much lower interest rate than you’d see on a credit card.

Is a hybrid loan right for you? Depending on what you need to borrow money for, it is an appealing option to consider when you need cash for things like unexpected expenses, big projects, and more. 

3 ways you can use a hybrid loan

Young couple paying bills online at kitchen table

1. Refinancing and/or consolidating debt

Americans paid down nearly $83 billion in credit card debt in 2020, but some experts predict a spending surge in 2021,1 with average credit card rates nudging above 16%.2 It helps borrowers shore up their credit history while saving because it uses an interest-bearing savings account as loan collateral. This effectively reduces the balance of your loan while improving your credit.

If you're struggling to make payments on multiple loans, debt consolidation (refinancing) can put you in a much better position to make your repayments. Because this option both reduces rate-related expenses and simplifies repayment schedules, it’s no wonder that it’s so popular – 38% of consumers who sought personal loans in early 2020 were consolidating debt.3 In addition, if you have a checking account with First Financial, we offer additional loan rate discounts to our relationship-based account holders.

Happy father supervising teen daughter driving in her new car

2. Covering unplanned expenses

We’ve all been there; you think you have all of your expenses anticipated and budgeted out, but then something happens. Maybe your child needs new braces, or it’s time for them to get their first car. It could be unexpected damage like a broken furnace or a higher-than-usual energy bill.

As much as we plan, unpredicted expenses will likely creep up on us from time to time. With our f1RST Quick Loans, borrowers can access as much as they need up to their credit limit (maximum $250,000) for six months. This may be why thousands of our clients rely on our f1RST Quick Loans to get through life’s pricier surprises. Never forego that emergency dental appointment or unexpected car repair again.

Young family looking at kitchen during home renovation

3. Home improvements

Nearly half of all millennials who purchased homes during the pandemic planned to invest $50,000 or more in renovations, and 46% were over budget in the first year.4 If you’re renovating a home or adding extra rooms to a house, you might not have an official estimate of the cost of repairs. Unexpected expenses can always pop up once you start the work, like having extra contractors to pay or underestimating the price of certain materials.

Unlike a home improvement loan (which comes with a fixed amount), a personal line of credit gives you the ability to repeatedly draw on and pay off your credit line to cover additional costs. People commonly take out home equity lines of credit (HELOC) to do improvements on their homes because this enables them to access much larger amounts of money that can be used for a variety of purposes, with a variable interest rate.

This increased flexibility gives homeowners room to breathe when it comes to home improvement because you can borrow as much or as little as you need through a revolving line of credit instead of a fixed sum that doesn’t enable you access to emergency funds.


A f1RST Quick Loan is a personal loan that can be used for anything you want. With no collateral required, you can use the money to take care of your immediate needs.

With a $50 origination fee and no pre-payment penalties, our f1RST® Quick Loan could be the perfect hybrid loan for you, no matter what reason you need the funds.

  • Quick and easy online application process
  • Low rate and interest-only payments for the first six months5
  • Loan amounts range from $2,000 - $250,0006
  • After six months, you repay the balance as a fixed rate installment loan over 60 months

Learn more about our f1RST® Quick Loan and apply today.

1 “5 ways a personal loan can work for you,” First Financial Bank; https://www.bankatfirst.com/personal/discover/flourish/uses-for-personal-loan.html

2 Ibid.

3 Ibid.

4 Ibid.

5 The loan will have a draw period of 6 months. Interest only payments will be required during the draw period. After 6 months any outstanding balance will convert to a 60 month term loan which will require principal and interest payments. As of October 11, 2023, the repayment period APR will range from 11.54% - 16.54% APR. Your final repayment period rate will be determined based on your credit score. APR = Annual Percentage Rate.

6 Online First Quick Loan applications must be requested in amounts between $2,000 and $50,000. Applications above $50,000 must be made in a branch and require additional information and documentation.

All loans subject to credit review and approval. The information on this page is accurate as of October 2023 and is subject to change. First Financial Bank is not affiliated with any third-parties or third-party websites mentioned above. Any reference to any person, organization, activity, product, and/or service does not constitute or imply an endorsement. By clicking on a third-party link, you acknowledge you are leaving bankatfirst.com. First Financial Bank is not responsible for the content or security of any linked web page. Member FDIC / Equal Housing Lender.

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