Average bank rates on personal loans are about half of what cards charge. Here is what that gap means on $10,000, when a fee changes the answer, and when a card is still the better tool.
By the CalcLedger editorial team · Updated October 2026 · 5 min read · Examples use illustrative rates · How we calculate
If you carry a balance on a credit card, a personal loan can turn it into a fixed payment with an end date and, usually, a lower rate. But the rate on your offer, any origination fee and your habits after the payoff decide whether it actually saves money. Here is the math with real national averages.
The Federal Reserve's consumer credit release (G.19), released September 8, 2026, reports average rates at commercial banks. These are averages across borrowers, not offers; your rate depends on your credit and income.
| Product (Q2 2026) | Average rate |
|---|---|
| 24-month personal loan | 11.86% |
| Credit card, all accounts | 20.94% |
| Credit card, accounts assessed interest | 22.15% |
Here is $10,000 repaid three ways. The loan uses the 11.86% average; the card uses the 22.15% average with no new charges.
| Plan | Monthly payment | Months to pay off | Total interest |
|---|---|---|---|
| Personal loan, 24 months at 11.86% | $470 | 24 | $1,282 |
| Card at 22.15%, paying the same $470 | $470 | 28 | $2,817 |
| Personal loan, 36 months at 11.86% | $331 | 36 | $1,933 |
| Card at 22.15%, paying the same $331 | $331 | 45 | $4,750 |
| Card at 22.15%, minimum only (interest + 1%, at least $35) | $285 at first, then less | about 266 | $16,960 |
Total interest to pay off $10,000
Personal loan at 11.86% vs. card at 22.15% with the same payment
With the same monthly payment, the loan clears the debt four months sooner and saves about $1,535 on the 24-month plan. On the 36-month plan the gap is about $2,817, because the card's higher rate has more months to work.
Many personal loans take an origination fee out of the money you receive. On $10,000 over 24 months at 11.86%, a 5% fee means you get $9,500 but repay $10,000, which raises the true APR to about 17.1%. An 8% fee pushes it to about 20.4%, close to the card rate. Compare the APR, not just the interest rate (see APR vs. interest rate), and our origination fee guide shows the math.
Applying for a loan adds a hard inquiry, which can lower your score a little for a while. Paying cards down with a loan lowers your credit utilization, which usually helps. Closing old cards can raise utilization again, so many people keep them open with a zero balance. Read more on how card interest adds up in how credit card interest is calculated.
Is a personal loan cheaper than a credit card?
Usually, if you carry a balance. In Q2 2026 the average 24-month personal loan rate at banks was 11.86%, compared with 22.15% on card accounts that paid interest. Your own offer, including any origination fee, is what counts.
How much can I save on $10,000?
Paying $470 a month, a 24-month loan at 11.86% costs about $1,282 in interest, while the same payment on a 22.15% card costs about $2,817 and takes 28 months, a saving of about $1,535.
Does a personal loan hurt my credit?
The application adds a hard inquiry, which can lower your score slightly for a while. Paying down card balances lowers your utilization, which often helps more over time.
Should I use a personal loan or a balance transfer?
A 0% balance transfer can be cheaper if you can pay off the balance before the promotion ends and the fee is modest. A personal loan gives a fixed payment and end date. Compare both with your numbers.
Average rates are national figures from the Federal Reserve, not offers. Card figures assume interest charged monthly and no new purchases.
Rules, limits and program details are checked against these official sources. Example numbers are calculated by CalcLedger with the formulas on our how we calculate page. Read our editorial policy.