When to use a personal loan to pay off credit card debt

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 dig your way out.

This is mostly due to high interest rates on credit cards. With the average credit card APR (annual percentage rate) at 19.64% as of January 2026, consumers are stuck paying significant sums of money in interest. Because of this, a small amount of their minimum payment actually goes towards paying down a credit card balance.

These challenges are why many people consider consolidating their credit card debt with a personal loan.

When to use a personal loan for credit card debt

Debt consolidation works by taking out a single loan to pay off multiple other debts. True, consolidating debt with a personal loan means trading one kind of debt for another. However, this strategy has advantages — if you can qualify for a personal loan with affordable interest rates and fair terms.

You can qualify for a lower interest rate

Qualifying for the best personal loan interest rates and terms typically requires a FICO score of 800 or higher. But you may get competitive (that is, close to average) rates with a score of 670 or higher.

Either way, personal loans come...