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.

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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

Credit card balance

₹

Card interest rate

Per year. Indian cards charge ~36–48% a year.

Personal loan / transfer rate

Per year. Personal loans are typically 11–18%.

Loan tenure

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.

How it works

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.

Method & sources

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.

What this doesn't cover

Card and loan rates and fees vary widely — enter your actual terms.
Ignores reward points and prepayment penalties.

Frequently asked

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.

Related guides

The credit card minimum-payment trap — and how to actually escape itPaying the 'minimum amount due' feels responsible. It's the single most expensive habit in personal finance — engineered to keep you in debt for years. Here's how the trap works, what it really costs, and three honest ways out.

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