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

By Holly D. Johnson, Bankrate.com

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.

Related Articles

This is mostly due to high interest rates on credit cards. With the average credit card APR (annual percentage rate) at 20.01 percent as of October 2025, 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.

Debt consolidation works by taking out a single loan to pay off multiple other debts. True, consolidating debt with a person