Using a personal loan for debt consolidation

Banks averaged 11.9% on loans and 22.36% on cards in August 2026 (Federal Reserve G.19). With a gap that wide, a low-fee personal loan for debt consolidation beats your cards.

The first thing to do is call a specialist. Here are the options they walk you through. A 5% fee on $15,000 takes $750 off the top, so the APR must still beat your card rate.

When a personal loan for debt consolidation makes sense

Three things need to be true. The APR you are offered is under your card rate. You can keep up the payment for the whole term, and you will not run the cards back up.

Mike meets all three. His cards average 23%. His payment at 11.9% over four years is $394, which is less than his $450 in minimums.

So the loan lowers both his rate and his monthly bill. Call and the specialist sets your own minimums beside the loan payment.

Skip the loan if the offer is at or above your card rate. Skip it if the fee is over 5%. Skip it too if you are already behind on payments, because a lender will then offer you only the top of its range.

Rates by credit score

Lenders do not post one price for each borrower, so the honest answer is a range. The 16 lenders we reviewed run from 5.96% to 35.99%.

LightStream says at least 33% of applicants for its lowest rate got it between April and June 2026 (LightStream). Wells Fargo says at least 10% of its approved applicants got its lowest rate in the same months.

Everyone else pays more. So expect an offer above the lowest advertised rate. See the full table of current rates.

Fees to avoid

Some lenders take a charge out of your loan before you get the money. Upstart’s example is a $10,000 loan with an $815 fee (Upstart).

The borrower receives $9,185 but still repays the full $10,000 plus interest. Sixty rounded payments of $261 come to about $15,660.

The specialist checks each lender’s charges with you on the call. For Mike, a 5% fee on $15,000 is $750.

Over four years, a loan with no fee at 13% beats a loan with a 5% fee at 11.5%.

Your odds of approval

Lenders weigh credit, income and the debts you already pay. The CFPB gives an example of $2,000 of payments on $6,000 of income, which is a 33% ratio (CFPB).

That is an example, not a cutoff for a yes. Mike’s 700 score does not prove he will get an offer, and his ratio does not prove it either.

If borrowing looks expensive for you, compare other options when loans cost too much.

Checklist

• Your last two pay stubs
• A photo ID
• Your card statements with balances and rates
• Your credit score

On the call, the specialist helps you prequalify with a soft pull at two or three lenders. A prequalification is an estimate, and a preapproval is a firmer offer.

We compare the APR, fee and term of each offer with you. We also check which lenders pay your cards directly.

Then run the best offer on the personal loan calculator.

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