If you've been putting off consolidating credit card debt, the math may have quietly shifted in your favor.
Average rates on personal loans have been drifting lower, and for borrowers with solid credit, the gap between a card's APR and a loan's APR is wider than it's been in a while.
It means the comparison is finally worth running again.
The Federal Reserve spent 2022 and 2023 pushing interest rates up to fight inflation, and nearly every consumer loan got more expensive.
Credit card APRs jumped past 20% on average.
Personal loan rates climbed too, though not as dramatically.
Now that inflation has cooled and the Fed has started easing, those rates are following the same path down, just more slowly than card rates.
Many store cards and general-purpose cards now sit in the 24% to 29% range for people with average credit.
A personal loan for the same borrower often lands somewhere in the mid-teens.
On $10,000 of debt, that difference can mean thousands of dollars in interest over a few years, which is why debt consolidation remains one of the most common reasons people apply.
Advertised "starting at" APRs usually require excellent credit, steady income, and low existing debt.
Miss any of those, and your actual offer could be several points higher.
Lenders also price by loan term, so a five-year loan typically carries a higher rate than a three-year one, even from the same company.
Where you shop matters as much as your credit score.
Banks, credit unions, and online lenders all price differently, and credit unions often beat big banks for members.
Getting prequalified takes minutes and usually triggers a soft credit pull, meaning your score isn't dinged.
You can compare offers side by side before committing to anything.
Watch the fees, because they can erase the savings.
Origination fees of 1% to 8% get subtracted from what you receive, so a $10,000 loan might only deposit $9,400 while you repay the full amount.
Late fees and prepayment penalties vary widely too.
Always compare the APR, not the interest rate, since the APR folds in fees.
One trap worth naming: using a personal loan to pay off cards, then running the cards back up.
That leaves you with two payments instead of one and no real progress.
If that pattern sounds familiar, the loan alone won't fix it.
Also consider whether a balance transfer card beats a loan.
A 0% intro APR for 15 to 21 months can be cheaper than any loan, provided you can clear the balance before the promo ends.
After that, the rate resets, often painfully high.
The loan is the steadier option, the transfer card the cheaper one if you're disciplined.
Rates are better than they were a year ago, but they aren't low.
Run the numbers, compare at least three offers, and read the fee section twice.
Final Thoughts
If it doesn't, waiting another few months could still improve your odds as the Fed continues easing.