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Using a personal loan to pay off credit card debt could be a smart move if you can get a lower rate or if you’re juggling multiple credit card payments.
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Paying off credit card debt with a personal loan may not be right for you if you are overwhelmed by debt
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Before using a personal loan to pay off debt, review your spending habits
In a perfect world, no one would need to take out a loan to consolidate and pay off debt. In the real world, however, sometimes borrowing money is the only way to get ahead.
This is mainly due to the high interest rates on credit cards. With the average credit card APR (annual percentage rate) at 19.60% in February 2026, consumers are stuck paying significant sums of money in interest. Because of this, a small amount of your minimum payment actually goes toward paying off a credit card balance.
These challenges are why many people consider consolidating their credit card debt with a personal loan.
Debt consolidation works by taking out a single loan to pay off other debts. It is true that consolidating debt with a personal loan means changing one type of debt for another. However, this strategy has advantages: if you can qualify for a personal loan with affordable interest rates and fair terms.
To qualify for the best interest rates and terms on personal loans, a FICO score of 800 or higher is typically required. But you can get competitive (i.e., close to average) rates with a score of 670 or higher.
Either way, personal loans have an average APR of 12.15% as of February 2026. That’s considerably lower than the current average credit card APR of 19.60%, meaning your interest savings could be substantial.
If you’re juggling multiple credit cards with their own payments and APRs, it can be difficult to organize a debt repayment plan. You need to make sure you make and maximize your payments each month. Using a personal loan to pay off debt helps you get rid of multiple payments and get it down to one payment per month and hopefully with a much lower APR.
Consider using a debt payment calculator to determine how much sooner you could pay off your debt with a lower interest rate.
Think about this simple example. Imagine you have $5,000 in debt on one credit card with a 17% APR and $7,000 in debt on a second credit card with a 21% APR. You can only deposit $100 on each credit card per month, for a total of $200 each month.
At that rate, you’re not even paying all your interest, so you’ll never pay off debt. If you can get a personal loan for your total $12,000 in credit card debt with a 10% APR, you’ll be able to contribute your $200 each month and start paying more than your interest each month.
If you’re struggling under the weight of your credit card debt and still spending more on payments each month than you earn, a personal loan with a lower APR and a set payment schedule may be exactly what you need.
You may be able to secure a lower monthly payment on your consolidated debt with a lower APR and a long enough payment schedule. You’ll have to play with a debt consolidation calculator to be sure.
A big problem with credit cards is that if you continue using them to make purchases, you may never pay off your debt. Personal loans, on the other hand, come with a fixed interest rate, a fixed monthly payment, and a fixed payment schedule that dictates the exact date you will pay off your debt forever.
If you’re tired of making payments with credit cards but never making much progress, you might be better off consolidating your debt with a personal loan and then switching to cash or debit cards.
Applying for a personal loan to pay off credit cards can be a task that will save you money, but this is not always the case. Signs that you may want to try a completely different debt consolidation method may vary from person to person, but may include the following.
If you have a fairly manageable amount of debt that you can comfortably pay off within 12 to 21 months, you may want to consider applying for a balance transfer credit card instead of a personal loan to pay off the debt. With a 0% APR credit card, you can often earn zero interest on balance transfers for up to 21 months, although a balance transfer fee will likely apply.
While balance transfer fees can cost up to 3% to 5% of your transferred balances upfront, you could easily save hundreds of dollars or more in interest by paying off your debt during your introductory offer. Some balance transfer credit cards also offer rewards and consumer benefits, so be sure to compare offers.
If most of your credit card debt is due to bad spending habits, consolidating your debt will not prevent you from going into more debt if you continue to practice bad spending habits.
You may want to reconsider your financial strategy before attempting to consolidate debt so you can control your spending. Consider consulting a personal finance advisor or learning about different budgeting methods. Find what works for you and adopt habits that will keep you debt-free in the long run before you try to address a symptom of your biggest spending problem.
Finally, there are times when you may have so much debt that you feel unable to pay it off without help. In these circumstances, working with a debt relief company or nonprofit Consumer Credit Counseling Services may be your best option. You can also look into debt management plans or debt settlement plans, although the Federal Trade Commission (FTC) warns that not all third-party companies that offer debt relief help are reputable.
If you have so much debt that it seems mathematically impossible to pay it off in your lifetime, you could also be a candidate for bankruptcy. It may be helpful to meet with a CCCS counselor before making a decision. To weed out bad players, the FTC says you should consult any agency you’re considering with your state’s Attorney General and local consumer protection agency.
While it can be helpful to use a personal loan to pay off credit card debt, it is not the best option for everyone. Some alternatives include:
Imagine never having to pay a credit card bill again or having the money you want to take a vacation or do something fun. By focusing on paying off debt, you can free up cash each month, even if your main goal is simply to have some extra money to save.
A personal loan can make a lot of sense for debt consolidation, but be sure to consider all the options and tools that may be available to you.
Getting out of debt requires you to stop racking up more bills you can’t pay. No matter which debt reduction option you choose, stop using credit cards and switch to cash or your debit card while you’re in debt payoff mode.
