Credit card debt has a knack for creeping up on you. With everything from milk to rent costing more, it's easy for balances to grow over time. And it's increasingly common; 172 million people have credit card balances, according to TransUnion, and the average amount of credit card debt per borrower was $6,371, up nearly 3% from last year.

Credit cards usually have sky-high rates, making it harder to take back control of your finances. That's why consolidating with a personal loan can be so effective. In general, personal loans have much lower rates than credit cards, so you can cut down on the interest that accrues and pay off your debt faster.

Here's what you need to know about consolidating your credit cards with a personal loan.

A debt consolidation loan is a type of personal loan used to pay off your existing debt, such as credit card balances or medical bills. These are installment loans, so you take out a lump sum and use the money to pay off your debt. Going forward, you will make one monthly payment to your personal loan lender until the debt is repaid.

With lower rates and fixed payments, debt consolidation loans can have a lower overall cost than credit card debt.

For example, say you had $6,000 in credit card debt and an annual percentage rate (APR) of 20%. If you made the minimum payment of $180 per month, it would take you over four years to pay off your debt. Plus, you'd pay $2,830 in interest charges.

In this case, consolidating your credit card debt with a personal loan could save you thousands. Say you qualify for a loan with a three-year term at 10% APR. Your monthly payment would be slightly higher — $193 — but you'd pay just $969 in interest charges. That’s a savings of over $1,800, and you'd be out of debt a year sooner thanks to debt consolidation.

Although debt consolidation can be an effective way to manage your credit card balances, it's not for everyone. Weigh the risks and benefits before you decide.

• Debt consolidation loans have lower rates. If you have good credit, you can likely qualify for a loan with a lower rate than the one on your credit cards.

• You have predictable payments. Consolidation loans typically have fixed interest rates and repayment terms, so you'll make regular monthly payments over a period of several years. The payment never changes, so it's easier to budget.

• You can get out of debt faster. With a lower rate and fixed monthly payments, you reduce the amount of interest that builds. More of your payments will go toward the principal balance, helping you get out of debt sooner.

• Not everyone qualifies for the lowest rates. For debt consolidation loans to save you money, you need to qualify for a lower rate. To do so, you typically need good to excellent credit. If your credit score isn't high enough, you may not qualify for a low-interest loan.

• It doesn't solve the root cause of your debt. Debt consolidation makes it easier to get out of debt, but it doesn't fix how your credit card balances got to where they are in the first place. Without addressing the root causes — by budgeting, boosting your income, and controlling your spending — it can actually worsen the problem if you rack up credit card debt along with your personal loan.

• You must be disciplined to be successful. For a personal loan to work, you must be disciplined with your payments. Otherwise, you risk missing a payment and dealing with late fees and damaged credit.

Read more: 10 tips to improve your credit score in 2025

Look up your credit card statements and total your balances together. The result is how much you'll need to borrow to consolidate all of your debt with one loan.

You can save time during the application process by gathering your paperwork ahead of time. For example, you'll usually need a copy of your pay stubs or recent tax returns and recent credit card statements.

Read more: How to apply for a personal loan

Now, you're ready to shop around. Many lenders allow you to check your loan eligibility and view potential interest rates with only a soft credit check, which doesn't affect your credit score. These prequalification tools let you view rates, loan term options, and your monthly payment amounts from each lender.

When reviewing your options, consider loan terms, APRs, and fees. While a longer term can be appealing because it gives you a smaller monthly payment — and some personal loan lenders offer terms as long as seven years — it’s wise to opt for the shortest term you can afford. Shorter terms tend to have lower rates, and you'll pay less in interest over time.

Read more: What is the best place to get a personal loan?

Once you've found the right loan, submit a loan application. You'll typically need to provide your name, contact information, Social Security number or other identifier, income, employment information, and consent to a hard credit check.

With most personal loans, you'll get a credit decision quickly (usually within a few minutes or hours).

If your loan application is approved, you’ll choose a disbursement method. You can usually opt for electronic deposits into your checking account, or you can request a check in the mail. Some lenders even offer direct creditor payments and will pay off your credit card balances on your behalf.

After your loan is disbursed, it's a good idea to sign up for automatic payments. Some lenders offer autopay discounts, but signing up for automatic payments can ensure you never miss a payment, helping you stay on track.

Debt consolidation works best if you owe a relatively manageable amount of credit card debt and still have good credit. But depending on your circumstances, one of the following strategies may be a better fit.

If you have multiple types of debt or can't qualify for a low-interest personal loan, the debt avalanche strategy can be an effective do-it-yourself approach. With the debt avalanche, list all of your outstanding debt — including credit cards, medical debt, or student loans — sorting them from the highest APR down to the loan with the lowest rate.

Make the minimum payment for each account on time every month. But, review your spending and look for extra funds you can put toward your debt. Any spare cash you have — even just an extra $10 or $20 — goes toward the account with the highest APR. Keep that process going until the account is paid off, then put your extra payments toward the account with the next-highest APR, and so on.

By targeting your highest-interest debt, you'll save more money on interest and get out of debt sooner.

If you have excellent credit and a small amount of debt — an amount you can pay off in 18 months or less — a balance transfer credit card may be a better option. You can apply for a credit card that offers 0% APR for a set period, such as 15 or 18 months. After that, the standard purchase APR applies.

A balance transfer credit card gives you time to pay down your balance without interest, allowing you to save money and pay off debt faster. Note that you'll often pay a fee of about 3% to transfer your debt, so factor that into your payoff calculations.

If your debt is out of your control and you're in danger of missing payments, contacting a nonprofit debt counselor can be a good idea. They can help you enter into a debt management plan (DMP), a formalized program that allows you to pay off your debt within a few years. The debt counselor will negotiate with your creditors to reduce their fees, and you'll make fixed payments every month.

DMPs also involve budgeting help and ongoing check-ins, helping you stay motivated and focused on debt repayment, so you're more likely to succeed.

The U.S. Department of Justice maintains a list of approved debt counseling agencies.

Related: Are credit card debt relief programs legit?

During the loan approval process, lenders will consider your creditworthiness, including your credit score and credit history. They will also verify your monthly income and credit utilization by comparing your debt load to your income. Lenders will also determine what amount they are willing to loan you, and the repayment period and interest rate required to offset the risk they assume in granting the new loan.

Borrowers with excellent credit can access the lowest available APRs. Lenders will make loans to borrowers with fair credit, but the higher interest rates charged to borrowers with bad credit may offset any potential savings.

Read more: How to get approved for a personal loan

It probably is if you qualify for a new loan with an interest rate significantly lower than what you already pay on your existing debt. A debt consolidation loan doesn't make sense if you cannot qualify for a lower APR than what you're currently paying.

There are two instances to consider another debt reduction strategy: 1) If the balances you owe are small and can be quickly paid off with a concentrated effort, or 2) If you owe too much in existing debt to manage a debt consolidation plan.

Your cost will include the interest you pay over the life of the loan and any upfront or ongoing fees, such as a personal loan origination fee. You'll want to compare that to the interest you're currently paying on existing debt.

In the short term, your credit score may fall as the debt you add from the new loan is reflected in your credit history. However, when the payoffs are noted on your credit card debt, your credit score is likely to recover. With steady payment on the new loan and no late or missed payments, your credit score will likely improve over time.

Unlike home mortgages and vehicle loans, personal loans usually require less paperwork and time to qualify. However, a debt consolidation loan may seem riskier to a lender without an asset like a house or car to back the loan. With good credit and a proven repayment history, you should find lenders eager to work with you.

Combining your high-interest debt into one lower-APR loan is the foundation of debt consolidation. There are just a few ways that you can do this without borrowing money. One is to use a cash windfall, like an income tax refund, workplace bonus, or cash gift, to pay off existing debt.

You can also try contacting your creditors to see if they might give you a break on the interest rate, allow lower minimum monthly payments, or write off a backlog of fees.

Debt consolidation loans have repayment terms that typically last two to seven years.

Loan approval can happen as quickly as the same day, with loan proceeds generally issued within one week.

Debt consolidation loans can help reduce high-interest credit card debt and revolving lines of credit. They are not meant to erase loans for certain types of debt with property assigned as collateral, such as a home mortgage or vehicle loan.

The loan amount for a typical debt consolidation loan ranges from about $3,000 to $35,000 or more. Some lenders advertise loans up to $100,000, but those amounts are likely reserved for borrowers with exceptional credit.

This article was edited by Alicia Hahn.