Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

Full Bio →

Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Sep 12, 2011

Advertiser Disclosure

Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.

A personal loan from a private source like a bank is a short-term solution for those in need of some fast cash to help them in a financial crisis. One situation may be overwhelming credit card debt.

There are situations in which taking out a personal loan can help reduce payments and make credit card debt more manageable; however, there are many aspects of the process that might make this option less beneficial and even more expensive in the long run.

Obtaining a personal loan would not eliminate the credit card debt completely, it would merely shift it into another form. The borrower would owe the lender rather than the credit card company. Borrowers should keep in mind also that in order to receive a personal loan, they must have a good enough credit score for the lender’s approval, and this may affect the interest rate.

The additional disadvantage to switching over your debt to a personal loan is that they often have a shorter repayment period – no longer than five years – than credit card payments – up to 10 years. Less time to pay off the loan means higher monthly payments.

Finally, this option for debt management may also reduce a borrower’s credit score, which can hurt when applying for loans or credit cards in the future. However, if the individual proves that he or she can successfully manage this new loan over time, his or her score may actually go up.