Credit Card vs Personal Loan
Carrying card debt at 40%? See what a personal loan or transfer would save
Reviewed by the PaisaTools Editorial Team · Last reviewed September 2026
How to use: Enter your card balance, the card's rate, a personal-loan (or transfer) rate and a tenure — you'll see the loan EMI, both interest totals compared on the same payment, and what switching saves.
Example₹1,00,000 at 42% vs a 14% loan over 24 months → save roughly ₹67,000 in interest
Per year. Indian cards charge ~36–48% a year.
Per year. Personal loans are typically 11–18%.
The verdict
Save ₹66,981
A loan at 14% clears this far cheaper than carrying it on the card.
Loan interest (24 mo)
₹15.23K
EMI ₹4,801/mo
Card interest (same EMI)
₹82.21K
at 42%
Before you switch
- • Personal loans often carry a 1–3% processing fee, and a balance transfer may have a one-time fee — factor those into the saving above.
- • A balance-transfer card usually gives a low or 0% rate for a few months only; clear it within that window or the high rate returns.
- • Whichever you pick, stop putting new spends on the card until it's clear — new purchases lose the interest-free period once you carry a balance.
A reducing-balance / amortisation estimate comparing the two on the same monthly payment. Excludes GST on interest, fees and any promotional rates. Educational, not financial advice.
A credit card is the most expensive everyday borrowing most people carry — around 3–4% a month. If you can't clear the balance in full, that interest compounds fast. A personal loan or a balance transfer at a much lower rate can cut the cost sharply — the question is by how much, after fees.
This tool answers that honestly: it takes your balance, the card's rate and a loan rate, works out the loan's EMI, and then compares the two on the same monthly outgo — so you're not comparing a fast loan against a slow minimum payment. The difference is the interest a switch would save.
Two rules of thumb: the bigger the balance and the longer you'd otherwise take to clear it, the more a loan helps; and whichever route you pick, stop spending on the card until it's clear.
Compares a fixed-rate personal loan (standard EMI amortisation) against paying the same monthly amount toward the card at its reducing-balance rate. Indian credit cards commonly charge 3–4% per month (about 36–48% a year); personal loans typically run 11–18%. The comparison is interest-only and excludes 18% GST on card interest, loan processing fees (usually 1–3%), balance-transfer fees and any promotional rates — so confirm the all-in cost with the lender. Educational guidance, not financial advice.
- Card and loan rates and fees vary widely — enter your actual terms.
- Ignores reward points and prepayment penalties.
- Is it worth converting credit card debt to a personal loan?
- Usually, yes — if you're carrying a balance. Credit cards charge roughly 36–48% a year; a personal loan is typically 11–18%. On the same monthly payment, the loan clears the debt with far less interest. The exception is a small balance you can clear in a month or two, where the fees may outweigh the saving.
- How does a balance transfer differ from a personal loan?
- A balance transfer moves the debt to another card, usually at a low or 0% rate for an introductory period (often 3–6 months), after which the normal high rate returns — so it only helps if you clear it within that window. A personal loan gives a fixed lower rate over a longer, fixed tenure. This tool models the loan case; use a lower rate to approximate a transfer offer.
- What fees should I watch for?
- Personal loans commonly charge a 1–3% processing fee, and balance transfers often have a one-time fee too. The saving shown here is interest-only, so subtract those fees before deciding. Also check for any prepayment/foreclosure charge on the loan.
- Will this hurt my credit score?
- Taking a loan to clear a maxed-out card can actually help, because it lowers your card utilisation. A new loan adds a hard enquiry and a new account, which dips the score briefly, but clearing high-interest revolving debt is generally positive over time.