The Honest Guide to Using a Personal Loan for Debt Consolidation

Average credit card APR in the U.S. is now north of 22%. Personal loan APRs for borrowers with good credit start around 7%. The math works — but only if you avoid the three most common mistakes.

Mistake #1: Consolidating without changing the behavior. A consolidation loan moves your debt; it doesn't erase it. If your spending stays the same, you'll end up with the loan *and* a fresh round of card balances.

Mistake #2: Stretching the term too far. A lower monthly payment feels great, but a 7-year term at a slightly lower APR can cost more total interest than your original 22% cards.

Mistake #3: Ignoring origination fees. A 'low APR' loan with a 9% origination fee may not actually beat your card rate. Always compare APR-after-fees, not headline rate.

Used well, a 36- to 48-month consolidation loan with no origination fee from a top lender (SoFi, Discover, LightStream) can knock years off your payoff and save you thousands.