Special situations

Should I use a personal loan to pay off credit cards?

Short answer

Often yes. If the personal loan's APR is meaningfully lower than your weighted credit-card APR (typical card rates are 22-29%, personal loans for prime credit run 7-15%), consolidating saves substantial interest and gives you a defined payoff date. Avoid running the cards back up after consolidating.

Context

Credit-card consolidation via personal loan is one of the most common and financially effective uses of personal loans. The math works when the new APR is at least 5 percentage points below your weighted card APR.

The behavioural trap: many borrowers consolidate, feel relief from lower monthly payments, then gradually run the credit-card balances back up. Six months later they have the personal loan plus new card debt. If you don't trust yourself to keep cards at zero, freeze or lock them after consolidating.

Editorial

Reviewed by: Compliance Review
Last reviewed: May 22, 2026

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