Personal Loan vs Credit Card Calculator
Should you pay off a purchase or balance with your credit card or take a personal loan? Compare the interest, fees, monthly payment and payoff time of both and see how much the cheaper option saves.
How it works
Card: each month balance = balance × (1 + APR ÷ 12) − payment, until it reaches zero; card cost = interest paid · Loan: payment = (amount × (1 + fee)) × i ÷ [1 − (1 + i)⁻ⁿ], loan cost = payment × n − amount · savings = card cost − loan cost (negative = the card is cheaper)
Credit cards usually charge far higher interest than personal loans, so moving a large balance to a fixed-rate loan often saves money — but origination fees, a longer term or a small balance can erase the advantage. This calculator pays the card down with the fixed monthly amount you choose and compares the interest with the loan’s interest plus fee. A loan also gives a fixed end date, while a card only gets paid off if you keep paying the same amount and stop adding new charges.
Worked example
Financing 5,000: on a 24% APR card paid at 250 a month the balance is gone in 2 years 2 months (26 payments) and costs 1,449.36 in interest. A 12% personal loan for 24 months with a 3% fee added to the balance (5,150) has a payment of 242.43, so you repay 5,818.28 — 818.28 in interest and fee. The personal loan saves 631.08, and its payment is 7.57 lower each month.
Sources: CFPB — What is a personal installment loan? · CFPB — Credit cards
Frequently asked questions
Is it smart to use a personal loan to pay off credit card debt?
Usually yes when the loan rate is clearly lower than the card APR and you stop using the card for new debt. Check the origination fee and the term: a longer loan lowers the payment but can add interest.
Why can the credit card be cheaper?
If you pay the card aggressively, the balance disappears quickly and the interest stays small, while a loan’s fee is charged up front. Small balances paid off in a few months are often cheaper on the card, especially with a 0% promotional rate.
Does a personal loan help my credit score?
Paying a card down with a loan lowers your credit utilization, which often helps the score, and an installment loan adds to your credit mix. A new hard inquiry and a new account can lower it slightly at first.
What if I cannot afford a high card payment?
Then the card takes much longer and costs much more, and the comparison usually favours the loan. If the payment does not cover the monthly interest, the balance never falls — this calculator flags that case.
Related calculators
Educational estimate, not financial advice. Real contracts, fees, taxes, day-count and rounding rules differ — check the official cost disclosure and your agreement before deciding.