How to consolidate credit card debt with a personal loan | Earnest

Should you use a personal loan to pay off credit card debt?

By Ashley Billing | Published on March 11, 2026

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Credit card debt can feel stressful to think about—so it’s easy to put it off. But carrying a balance can get expensive quickly, especially when interest rates are high.

One option that may help is consolidating your credit card debt with a personal loan. If you qualify for a lower rate than you’re currently paying, a personal loan could reduce interest costs, simplify payments, and give you a clear payoff timeline.

What is credit card debt consolidation?

Credit card debt consolidation is a form of DIY refinancing. In simple terms, it means:

  1. You take out a personal loan (ideally at a lower APR than your cards).
  2. You use the loan funds to pay off one or more credit card balances.
  3. You repay the personal loan in fixed monthly payments over a set term.

This doesn’t make sense for everyone—so let’s walk through how to evaluate it.

Understanding the cost of credit card debt

Credit cards often carry much higher APRs than many other types of borrowing. Forbes Advisor’s weekly report estimated the current average credit card interest rate at 25.32% (as of March 9, 2026). And because many credit cards have variable rates, what you pay can change over time.

Say you carry a $5,000 balance on a credit card with a 25% APR. You commit to paying $150 per month and stop adding new charges.

Here’s what happens.

Month 1

You made a payment. But the balance barely moved.

Month 2

After 6 months, you’ve paid $900 total. But you still owe around $4,700.
That’s because high interest eats up a large portion of your payment early on.

If you continued paying $150 per month, it would take almost 5 years to pay off the balance. And you’d pay roughly $3,700+ in interest along the way.
That’s money that doesn’t reduce your original purchase. It just covers the cost of borrowing.

Example for illustrative purposes only. Actual results depend on your APR, compounding method, and payment timing.

What if you paid more?

If you increased your payment to $300 per month, you could pay off the debt in about 21 months. And you’d cut your total interest by more than half.

The numbers change fast when the rate is high.

Want to see your own payoff timeline?

Explore payoff strategies and see what repayment paths could look like with Earnest’s Payoff Pathtool

Using a personal loan to consolidate credit card debt

A personal loan can be a helpful consolidation tool when all three of these are true:

For context, Bankrate reported the average personal loan rate at 12.26% (as of March 4, 2026) for a borrower with a 700 FICO, a $5,000 loan, and a three-year term. Rates vary widely based on credit profile, term length, and lender.

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(ᵃ)Average credit card interest rates are accurate as of 01/26/2026. Source: https://www.bankrate.com/credit-cards/advice/current-interest-rates/

(ᵇ)Example chart shows calculations based on a 7-year Earnest Personal Loan with a fixed rate of 12% APR, which represents the mid-range of Earnest Personal Loan rates. Actual rates range from 7.99% to 24.99% APR with Auto Pay discount; lowest rates are reserved for the most qualified borrowers. The rate shown does not include the 0.25% Auto Pay discount. The 'High-Interest Rate Credit Card' APR of 19.62% is the average credit card interest rate as reported in Q1 2026. The savings estimate assumes the borrower applies the same payment behavior to the credit card balance as to the personal loan by making fixed, on-time monthly payments sufficient to repay the balance over 84 months. It also assumes the borrower does not take on any additional credit card debt during this period. Both calculations are based on 84 total monthly payments (7 years), with no origination fee and no prepayments.

Pros of consolidating credit card debt with a personal loan

Your interest rate can be more predictable

Many personal loans have fixed rates, which means your rate won’t fluctuate after you sign (as long as the loan is fixed-rate). That can make budgeting easier.

You get a lump sum to pay balances off faster

With a personal loan, you typically receive funds upfront—so you can pay off high-interest cards sooner and stop additional interest from accruing on those balances (as long as you’re not adding new charges).

You simplify multiple payments into one

If you have several cards, consolidation can reduce your monthly “mental load” by turning many due dates into a single fixed payment.

You get a clear payoff timeline

Credit cards can keep you in debt longer if you only make minimum payments. A personal loan comes with a set term—so you’ll know the finish line from day one.

If your main goal is combining balances into one fixed payment, learn more about Debt Consolidation Loans from Earnest

Cons to consider before you consolidate

Your monthly payment may be higher than your minimums

Personal loans have set payments. While that’s good for payoff structure, it can reduce flexibility compared to paying only the minimum on a card (even though minimums can keep you in debt longer).

Approval and rates depend on your credit profile

If you’re still building credit, you may have fewer options or higher APR offers. In that case, it might be worth focusing on improving your credit and cash flow first, then revisiting consolidation.

Consolidation doesn’t erase debt

A personal loan replaces credit card debt with installment debt. It can lower interest and simplify repayment, but you’ll still need a plan to stay on track—especially to avoid re-using cards and ending up with both a loan payment and new card balances.

If you’re weighing payoff approaches, start with Payoff Path to compare strategies side-by-side

How to consolidate credit card debt with a personal loan

1) Add up your balances (and check your rates)

List each card balance, APR, and minimum payment. Then estimate your total payoff cost if you keep your current plan.

2) Compare loan offers and terms

Look at APR, fees (if any), term length, and monthly payment. A lower APR is helpful—but only if the payment is realistic for your budget.

3) Apply and keep paying minimums in the meantime

If you apply for a loan, keep making at least minimum payments on your cards until balances are fully paid off—so you don’t risk late fees or credit damage.

4) Use the loan funds to pay each card

Pay off cards promptly after funding so interest doesn’t continue to accrue unnecessarily.

5) Stick to a payoff plan

Consider setting up autopay, and build a simple plan for how you’ll use credit cards going forward (for example: using one card for a small recurring bill you can pay in full each month).

Ready to explore consolidation? Check your options with Earnest Personal Loans

Alternatives to a personal loan for credit card debt

A personal loan isn’t the only path. Depending on your situation, you might also consider:

Bottom line

A personal loan from an online lender may be a smart way to consolidate credit card debt if it lowers your APR, gives you a manageable fixed payment, and supports a clear payoff timeline. The key is running the numbers—and having a plan to avoid building new balances after you pay cards off.

Compare payoff approaches with Payoff Path, or explore Earnest Personal Loans for consolidation.

About the Author

Ashley Billing

Ashley Billing writes about finance, work, and wellness, with a focus on practical strategies that can actually help. Drawing on years of experience in content marketing and digital storytelling, she crafts clear, actionable pieces designed to inform and empower readers.