Consolidation only works if the cards stay closed
The arithmetic of replacing 24% card debt with a 12% loan is sound. The failure mode is behavioural: the cards are paid off, the limits stay open, and within a year there is card debt again plus a loan payment. If you consolidate, close or freeze the accounts on the same day the balances clear.
Prequalify without damaging your credit
Most lenders offer a soft-pull prequalification showing your likely rate. Do several within a short window; soft pulls do not affect your score, and even the hard pulls from formal applications are generally treated as a single inquiry when clustered within 14–45 days for the same loan type.
Watch the term, not just the payment
Stretching a consolidation loan to 72 months makes the monthly number attractive and can cost more in total than the credit cards would have, despite the lower rate. Match the term to the shortest payment you can genuinely sustain, not the smallest payment available.
Alternatives worth checking first
A 0% balance transfer card if you can clear the balance within the promotional window; a credit union loan, which often prices well below online lenders; a 401(k) loan, which is cheap but risky if you leave the job; or a HELOC if you have equity and are disciplined, noting that it puts your home behind the debt.
Related guides
Long-form playbooks on the same topic, written by the RevenueLab editorial team.
FAQ
What is the monthly payment on a $15,000 personal loan?
At 12.5% over 48 months, roughly $400 a month, with about $4,200 of interest plus any origination fee.
Does an origination fee change the real rate?
Yes. Because the fee is deducted from the amount you receive, a 3% fee on a 12.5% loan produces an effective rate closer to 14%. Always compare on effective APR.
Is a personal loan good for debt consolidation?
It can be, when the loan rate is meaningfully below the card rate and you close the cards. The fixed term also forces a payoff date, which revolving debt never does.
What credit score do I need for a personal loan?
Most lenders start around 600, but the good rates begin near 700 and the best above 760. Below 640, the rate offered may be no better than the cards you are trying to replace.
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