Personal loan – Should you use it to pay off credit card debt?

If you are thinking about taking out a personal loan to clear your credit card debt, you should think about the pros and cons of this option. Although this can be a viable option for some people, it is essential to understand the potential risks and benefits associated with this type of debt relief.

Paying off debt can seem like an overwhelming and daunting task, especially when you are faced with multiple sources of debt, such as personal loans and credit card debt.

In this blog, we will be exploring whether it is an option to pay off personal loans with credit card debt in Ireland, and if so, what are the implications of doing so.

Reasons To Go For Credit Card Debt

Using credit card debt to repay a personal loan can be an excellent choice. Here are some benefits:

1.   Save Money

One of the primary advantages is that using credit card debt to pay off personal loan debt can help you save money, which is a significant advantage. Compared to personal loans, credit cards typically feature interest rates that are cheaper and more flexible when it comes to paying them back.

This indicates that you have the ability to make the payments over a more extended period, which could result in you paying back a lower total amount of money. You can also transfer your balance. It can help you save even more money in the long run if certain credit cards support this feature.

2.   Increase Your Credit Score

In Ireland, one of the best ways to raise your credit score for the least amount of money is to pay off loans with a credit card. Most credit cards have lower interest rates than other loans, so if you can make regular payments on time, you may pay less overall.

Good credit can lower your credit card interest rate. However, taking on additional debt while trying to repay a personal loan is risky, so keep that in mind. You should weigh your options and do your homework before making significant financial decisions.

3.   Easier Tracking Of Debt

Combining multiple loans into one payment plan with a single lender makes it easier for customers to track when they need to pay back what. This also helps you ensure you don’t miss payments, which could even hurt your already low credit score.

Reasons To Not Go For Credit Card Debt

A potential solution for addressing credit card debt is to obtain a personal loan, which may have a lower interest rate than the credit card and help you pay off the debt faster. However, there are some significant reasons why there may be better choices than a personal loan for paying off credit card debt.

1.   Fixed Loan

A personal loan is usually a fixed one, meaning you will have to make the same monthly payments. This can be a problem if you don’t have the money to make the payments or if you experience a financial emergency and don’t have the funds to cover the loan. With a credit card, you can make smaller payments when you can’t afford the total amount.

2.   Impact on Your Credit score

Another aspect to consider when considering a personal loan to manage credit card debt is the potential impact on your credit score. While the loan may allow you to pay off the debt more efficiently, missing payments or paying late could lower your credit score. This may make it more challenging to be approved for other types of loans, like a mortgage or car loan.

3.   Higher Interest Rates

The interest rates attached to personal loans are typically much higher than those attached to credit card balances. Because of this, it is possible that you will end up paying a higher total amount in interest for the duration of the loan than you would have if you had simply used the credit card.

This can be especially true if you have bad credit, as the interest rates for personal loans for people with bad credit in Ireland can be quite high.

4.   Getting Approved Isn’t Easy

Personal loans can be challenging to obtain. Many lenders will not offer personal loans to people with bad credit, and even if you do qualify, the loan amounts can be relatively small. You may end up having to take out multiple loans in Ireland for bad credit to cover your credit card debt, which can be a hassle.

In conclusion, while a personal loan may seem like a good option for paying off credit card debt, several potential drawbacks exist. You may end up paying more in interest, have a negative impact on your credit score, and even have difficulty getting approved for the loan in the first place. It is essential to consider all your options before taking out a personal loan, such as using payday loans in Ireland or other forms of credit to pay off the debt.

Alternatives to paying using a Credit Card

Having to pay back a personal loan can be hard on your finances, especially if you have bad credit. There are several different choices available in Ireland that could assist in alleviating some of the tension.

People with bad credit who need more money to pay back their loans can get a secured loan. With this type of loan, you don’t just get the money you need based on your income and credit score.

Instead, you use something like real estate or savings as collateral to get the money you need. This is helpful for people who might not meet the standard loan requirements but still want quick access to money.

A direct lender may be able to provide a loan to those with no assets or income. Direct lenders are more ready to take a chance on high-risk borrowers by offering them low-interest, modest personal loans in Ireland with bad credit. In contrast, banks are typically unwilling to lend money to individuals with poor credit scores.


Ultimately, choosing to use a personal loan to pay off credit card debt depends on an individual’s preferences and financial circumstances. Taking out a personal loan may be an easy way to consolidate your debt and simplify your payments.

But it is essential to consider the associated costs and fees and make sure you can afford the payments. If you are able to manage the repayment terms, a personal loan may be a good option. If not, it may be worth exploring other options, such as debt consolidation or budgeting, to help you manage your debt.

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