Could a Personal Loan Make Paying Your Credit Cards Easier?

If you have credit card debt and are trying to pay it off, taking on additional debt may be the last thing on your mind. But, the reality is, getting a personal loan could actually help you pay off your credit cards more easily in many situations.

There are three big reasons why a personal loan could actually help you deal with your credit card debt.

1. You can consolidate multiple cards into one loan

Personal loans can simplify the process of repaying your credit card debt if you have multiple cards to pay off. Say you have three different credit cards you owe money on. You have to send a payment to each one every single month and decide what order to pay them off.

If you get a personal loan, though, you could pay off all three credit cards. Instead of having multiple payments to manage, you would just have one loan to pay back each month instead. That's easier to remember and there's no complicated choices about which of your cards to send extra money to in any particular month.

2. You can often reduce your interest rate

Credit cards are notorious for having very high interest rates. But personal loans can be a whole lot more affordable. If you can get a personal loan that has a lower rate than your credit cards, you can reduce your interest costs substantially.

If you drop your rate, each payment you make on your loan each month will do more to pay down your balance. The payment will be applied to reducing the principal, or amount due, rather than just covering your interest expenses. You can become free of your debt faster and spend less out of your pocket doing it.

3. You'll have a predictable, fixed payoff schedule

Personal loans aren't like credit cards in terms of how you pay them. Credit cards require you to make only small minimum payments -- which could mean you'd be in debt for decades. As you pay down your card and then charge more on it, you also change the time it will take to become debt-free so you won't really know exactly when you'll have your full balance paid off.

With a personal loan, though, you pick a repayment term when you take out the loan. For example, you might select a loan with a five year or seven year payoff timeline. And then your monthly payment is set based on your interest rate and principal balance to ensure you pay off your loan by that deadline.

If you have a fixed-rate loan, the monthly payment set upfront will not change. This means you'll know exactly what you will pay each month during those years until you are debt-free.

This gives you a lot more predictability in terms of making sure you pay off your debt on a schedule that works for you, with a set monthly payment you can't just change on a whim. This is a huge benefit because it can be hard to stay motivated to pay off credit cards if you don't have a set end date in sight.

For all of these reasons, a personal loan could definitely make card repayment easier if you can qualify for one at a competitive rate.