Pros and cons of personal loans to pay off credit card debt

If you're ready to get rid of debt and gain more control of your finances, a debt consolidation loan is an option worth exploring. Many people use a personal loan to consolidate debt. Let's explore the pros and cons.

Quick overview: How a personal loan for credit card debt works

One way to get ahead of your credit card debt is to move it to a personal loan. You take out a new loan and use the funds to pay off existing credit card account balances. It could make sense if:

• You want to streamline your finances and reduce the number of monthly payments you make.

• You want a set pay-off date for the debt.

• You want a fixed interest rate.

• You qualify for a lower interest rate compared to what you're paying now.

• You're not at risk of running your credit card balances back up. If you do that after consolidating, you could make your debt situation worse.

After using the loan to pay off your credit card debt, you make regular monthly payments on your loan. Debt consolidation could help you get free from debt sooner than by slogging along with minimum payments.

Most personal loans are fixed-rate loans. Unlike credit card debt, your interest rate and monthly payments won't change. A fixed-rate personal loan gives you a one-time lump sum with a set payoff date, while a credit card is revolving credit with a variable rate that can rise over time. This is why many people use personal loans to consolidate credit card debt.

Benefits of personal loans and how to qualify in 2026

Some benefits of personal loans include:

• Fixed interest rates and monthly payments

• A preset payoff date

• The option to use your loan proceeds for a variety of purposes

Qualifying for a personal loan will generally depend on your:

• Credit score

• Income

• Debt-to-income ratio

Borrowers with strong credit and stable finances are typically offered the lowest interest rates, but many lenders also have options for those with fair credit.

Pros of a personal loan to pay off credit card debt

If you're feeling weighed down by credit card debt, you may want to consider using a personal loan for credit card debt consolidation. Here are a few potential benefits of this strategy:

• Unsecured debt. Personal loans are usually unsecured. They don't require collateral or home equity.

• Lower interest rates. The interest rates for personal loans tend to be lower than credit card interest rates. A personal loan could help you save money if you end up paying less in interest fees.

• Streamlined payments. Using a personal loan to pay off multiple credit card accounts could help you streamline your monthly payments.

• Fixed payments and a set repayment schedule. Most personal loans are fixed-rate, meaning the interest rate doesn't change. With a set payment amount and repayment schedule, you may feel more motivated as you work to pay off your personal loan balance.

Cons of a personal loan to pay off credit card debt

Consider some of the potential drawbacks of using a personal loan to pay off credit card debt:

• May not be available if your credit score is low. Your credit score could keep you from qualifying for a personal loan. If your credit score is too low to qualify or too low to get you an interest rate you're happy with, you might want to spend more time working to improve your score before applying for a new loan.

• Interest rates may be higher than other borrowing options. If you're a homeowner, you may want to explore a home equity loan or home equity line of credit (HELOC). They often have lower interest rates than personal loans.

• Potential to run up more credit card debt. If you've struggled to manage your spending with credit cards in the past, there's no guarantee that you won't end up back in debt. You could give yourself a financial safety net by closing your credit card accounts after you pay them off with the new loan.

Alternatives to paying off credit card debt with a personal loan

A personal loan isn't the only potential path out of credit card debt. A few other options could help you reduce what you owe, and the best fit depends on your budget, your credit, and whether you own a home.

• DIY debt payoff strategies: If you have extra money in your budget for debt payments, one of these strategies could help. The avalanche method targets your highest-rate balance first. The snowball method targets your smallest balance first. Neither requires new borrowing, so you could begin today.

• A home equity loan or HELOC: Homeowners could borrow against home equity, typically at much lower rates than a credit card. Your home is the collateral, so it backs up the loan, and you could lose it if you stop making payments.

• A debt relief program: A debt relief program negotiates with your creditors to resolve your debt for less than the full amount owed. This could be an option if you're already behind on your credit cards.

• Bankruptcy. Filing bankruptcy may be a solution if you're dealing with credit card debt you genuinely can't afford to repay. Consult a bankruptcy attorney to explore this option.

Who should (and shouldn't) use a personal loan to pay off credit cards?

Personal loans to pay off credit card debt are a popular strategy, but they may not be an ideal solution for everyone with credit card debt.

You may want to consider using a personal loan to pay off credit card debt if you:

• Qualify for a loan with a lower interest rate

• Can afford the monthly payments

• Feel confident that you'll avoid running up new debt

You may want to consider other ways to get rid of debt if you:

• Struggle with managing your spending

• Have a financial hardship that's making it hard to afford the debt in the first place

• Have credit score damage that makes your borrowing options (for now, anyway) expensive

If you need help learning to budget and establishing a debt payoff plan, check out free apps for budgeting and debt payoff, like the GOOD app.

Example of a personal loan to pay off credit card debt

Here's what paying off credit card debt could look like if you stick to your original cards.

Let's say you have $10,000 of credit card debt with a 29.99% interest rate. With this debt payoff plan, it would take you three years and eight months to get rid of your credit card debt.

Now here's how it could look if you could use a personal loan to pay off credit card debt. In the example, the loan has a three-year repayment term and 18% APR.

You'd save time as well as interest—your debt would be paid off eight months sooner, and you'd save thousands of dollars in total interest.

Next steps

It's never too late to prioritize your debt payoff goals. You don't have to be burdened by credit card debt forever. A debt consolidation loan is one way to make your credit card debt more manageable. Consolidating your credit card debt with a personal loan may be worthwhile.

The next steps are to find out your credit score and check with lenders who can pre-qualify you without hurting your credit score.