If you are paying 25% interest on credit cards, you are trapped. The bank wants you to stay in debt forever. The fastest escape route is a Debt Consolidation Loan.
This is a simple math trick. You take out a new personal loan at a low rate (e.g., 7%) and use it to pay off all your high-interest credit cards (25%) at once. You are now debt-free on the cards, and you have one single, cheaper monthly payment.
Why This Saves You Money
Let’s look at the numbers.
- The Trap: $10,000 debt at 25% interest = You pay $2,500 a year just in interest.
- The Fix: $10,000 loan at 8% interest = You pay $800 a year in interest.
- Savings: You instantly save $1,700 a year.
Top Personal Loan Lenders 2025
You need a lender that funds fast and has no hidden fees.
1. SoFi
The leader in online lending.
- Best For: Good credit scores (680+).
- Perks: Free unemployment protection. If you lose your job, they pause your payments.
- Rates: Competitive fixed rates with no origination fees.
2. LightStream
The “low rate” king.
- Best For: Excellent credit (720+).
- Guarantee: They will beat any competitor’s rate by 0.10%.
- Speed: They can fund your account the same day you apply.
3. Upstart
Best for “Fair” credit.
- Algorithm: They look at your education and job history, not just your credit score.
- Approval: Instant automated approval for many borrowers.
Interest Rate Breakdown
Your credit score determines your rate.
| Credit Score | Est. APR (Interest Rate) | Chance of Approval |
| Excellent (720+) | 6.99% – 9.99% | Very High |
| Good (660-719) | 10% – 15% | High |
| Fair (600-659) | 16% – 22% | Medium |
| Poor (<600) | 25%+ | Low |
Warning: Do Not Run Up the Cards Again
This strategy only works if you stop using the credit cards.
- Get the Loan: Money hits your bank account.
- Pay Off Cards: Login to Visa/Amex and pay balance to $0.
- Cut the Cards: Do not close the accounts (it hurts your credit score), but cut up the physical plastic so you can’t spend.
Check Your Rate for Free
Checking your rate does not hurt your credit score. It is called a “Soft Pull.”
Go to a lender like SoFi or Marcus, enter your info, and see how much money you can save every month.