PERSONAL LOAN VS. BALANCE TRANSFER
PERSONAL LOAN VS. BALANCE TRANSFER
PERSONAL LOAN VS. BALANCE TRANSFER
Which should you use to pay off debt?
Which should you use to pay off debt?
Which should you use to pay off debt?
A personal loan allows you to consolidate and pay off debt on a clear timeline with fixed monthly payments that fit your budget.
A balance transfer can cost less overall if you qualify for a 0% intro APR offer and pay it off in full before the promotional period ends – otherwise, you're back to a standard credit card APR for the remaining balance.
A personal loan allows you to consolidate and pay off debt on a clear timeline with fixed monthly payments that fit your budget.
A balance transfer can cost less overall if you qualify for a 0% intro APR offer and pay it off in full before the promotional period ends – otherwise, you're back to a standard credit card APR for the remaining balance.
A personal loan allows you to consolidate and pay off debt on a clear timeline with fixed monthly payments that fit your budget.
A balance transfer can cost less overall if you qualify for a 0% intro APR offer and pay it off in full before the promotional period ends – otherwise, you're back to a standard credit card APR for the remaining balance.
A personal loan allows you to consolidate and pay off debt on a clear timeline with fixed monthly payments that fit your budget.
A balance transfer can cost less overall if you qualify for a 0% intro APR offer and pay it off in full before the promotional period ends – otherwise, you're back to a standard credit card APR for the remaining balance.
Rocket Loans vs. balance transfers
Rocket Loans vs. balance transfers
APR
Fees
Time to repay
Minimum credit score
Balance transfer credit cards
Balance transfer credit cards
Often 0% intro APR, then up to 28% variable APR
3-5% of the total amount transferred
Ideally before promo APR ends (12-18 months)
670+ FICO®
Rocket Loans personal loan
Fixed as low as 7.99% APR
from start to finish
Fixed as low as 7.99% APR from start to finish
3.8% – 4.44% avg. origination fee with very good credit, based on amount and term (up to 9.99% max)
36 or 60 months (3 or 5 years)
640+ FICO®
Balance transfer credit cards
Rocket Loans personal loan
APR
Often 0% intro APR, then up to 28% variable APR
Fixed as low as 7.99% APR from start to finish
Fees
3-5% of the total amount transferred
3.8% – 4.44% avg. origination fee with very good credit, based on amount and term (up to 9.99% max)
Min credit
score
670+ FICO®
640+ FICO®
Time to repay
Ideally before promo APR ends (12-18 months)
36 or 60 months (3 or 5 years)
Balance transfer credit cards
Rocket Loans personal loan
APR
Often 0% intro APR, then up to 28% variable APR
Fixed as low as 7.99% APR from start to finish
Time to repay
Ideally before promo APR ends (12-18 months)
36 or 60 months (3 or 5 years)
Min credit
score
670+ FICO®
640+ FICO®
Fees
3-5% of the total amount transferred
3.8% – 4.44% avg. origination fee with very good credit, based on amount and term (up to 9.99% max)
Payoff comparison based on $12,000 balance
Payoff comparison based on $12,000 balance
A balance transfer can cost less – but only under the right conditions. Here's how the numbers compare.
A balance transfer can cost less – but only under the right conditions. Here's how the numbers compare.
A balance transfer can cost less – but only under the right conditions. Here's how the numbers compare.
Rate and timeline
Fee
Monthly payment
Total cost
Balance transfer credit cards
Balance transfer credit cards
12 months at 0% promo APR
$600 (5%)
$1,000/mo
$12,600
Rocket Loans personal loan
36 months at 10.37% fixed APR
Fixed as low as 7.99% APR
from start to finish
$469 (3.9%)
$389/mo
$14,014
Balance transfer credit cards
Rocket Loans personal loan
Rate and timeline
12 months at 0% promo APR
36 months at 10.37% fixed APR
Fee
$600 (5%)
$469 (3.9%)
Total cost
$12,600
$14,014
Monthly payment
$1,000/mo
$389/mo
Comparison uses the average interest rate and origination fee for an applicant with very good credit. Individual rates and fees may vary.
In this example, the personal loan comes with a lower upfront fee and a lower monthly payment that frees up $611 in your budget each month.
The balance transfer requires $1,000/month to pay off in time – and if you make additional purchases on the card or need more time to pay, the standard APR kicks in and can quickly erase any savings.
In this example, the personal loan comes with a lower upfront fee and a lower monthly payment that frees up $611 in your budget each month.
The balance transfer requires $1,000/month to pay off in time – and if you make additional purchases on the card or need more time to pay, the standard APR kicks in and can quickly erase any savings.
In this example, the personal loan comes with a lower upfront fee and a lower monthly payment that frees up $611 in your budget each month.
The balance transfer requires $1,000/month to pay off in time – and if you make additional purchases on the card or need more time to pay, the standard APR kicks in and can quickly erase any savings.
Balance transfer credit cards
Rocket Loans personal loan
Rate and timeline
12 months at 0% promo APR
36 months at 10.37% fixed APR
Monthly payment
$1,000/mo
$389/mo
Total cost
$12,600
$14,014
Fee
$600 (5%)
$469 (3.9%)
Which is better for you?
Which is better for you?
Choose a personal loan if...
You need $10,000 or more
You need $10,000 or more
You want a fixed rate that won't change
You want a fixed rate that won't change
You want payments that fit your monthly budget
You want payments that fit your monthly budget
You want a set end date
You want a set end date
You’re consolidating multiple debts into one payment
You’re consolidating multiple debts into one payment
Choose a balance transfer if...
You’re looking to pay down $10,000 or less
You’re looking to pay down $10,000 or less
You can pay it off within a short promotional period
You can pay it off within a short promotional period
You can commit to not using the card for new purchases
You can commit to not using the card for new purchases
You have a balance transfer offer from an issuer who doesn’t hold any of your current debt
You have a balance transfer offer from an issuer who doesn’t hold any of your current debt
What to know about balance transfers
What to know about balance transfers
What to know about balance transfers
Your transfer limit is capped at or below your new card's credit limit (often $10,000 to $15,000).
Some issuers won't allow you to transfer non-credit-card debt, such as car loans or student loans.
Most issuers won't let you use a balance transfer to pay off debt you currently owe them – for example, you can’t move a Discover balance to a new Discover card.
Your transfer limit is capped at or below your new card's credit limit (often $10,000 to $15,000).
Some issuers won't allow you to transfer non-credit-card debt, such as car loans or student loans.
Most issuers won't let you use a balance transfer to pay off debt you currently owe them – for example, you can’t move a Discover balance to a new Discover card.
0% intro APR offers can be a trap
0% intro APR offers can be a trap
0% intro APR offers can be a trap
The balance transfer pitch is usually "pay no interest for 12–18 months." But that only works if you have the cash flow to aggressively pay it down. When your budget is spread too thin, you’re at risk of taking on more debt.
The balance transfer pitch is usually "pay no interest for 12–18 months." But that only works if you have the cash flow to aggressively pay it down. When your budget is spread too thin, you’re at risk of taking on more debt.
Personal loans are designed to consolidate debt
Personal loans are designed to consolidate debt
Personal loans are designed to consolidate debt
If you have balances across multiple cards or loans, a balance transfer might not cover all of it. A personal loan has the potential to pay off everything and replace it all with one tidy solution.
If you have balances across multiple cards or loans, a balance transfer might not cover all of it. A personal loan has the potential to pay off everything and replace it all with one tidy solution.
Certainty is valuable
Certainty is valuable
Certainty is valuable
A personal loan has a fixed rate, fixed payment, and a set payoff date – the total cost is known before you sign. A balance transfer's true cost depends on the future. Its primary benefit is temporary, and then you're back to standard credit card interest.
A personal loan has a fixed rate, fixed payment, and a set payoff date – the total cost is known before you sign. A balance transfer's true cost depends on the future. Its primary benefit is temporary, and then you're back to standard credit card interest.
Free debt consolidation loan calculator
Free debt consolidation loan calculator
Free debt consolidation loan calculator
Instantly estimate your rate, payment, and savings – no personal info required.
Instantly estimate your rate, payment, and savings – no personal info required.
Instantly estimate your rate, payment, and savings – no personal info required.
Instantly estimate your rate, payment, and savings – no personal info required.
Hear from clients who took the next step
Hear from clients who took the next step
“The better interest rate was what drove me to work with Rocket Loans. Thank you for helping me escape predatory banking practices.”
– Phil
“My FICO Scores are great. But even people with good credit need to consolidate debt. Rocket Loans saved the day! In seconds, I was approved with exceptional terms and fixed interest.”
– Ryan
“I was able to pay off multiple high-interest cards. Now I have one low, predictable monthly payment. The entire process was smooth, transparent, and stress-free.”
- Lisa
“This is my second review but it is worth raving about. Very quick, very thorough, completely perfect.”
– Gail
“The better interest rate was what drove me to work with Rocket Loans. Thank you for helping me escape predatory banking practices.”
– Phil
“My FICO Scores are great. But even people with good credit need to consolidate debt. Rocket Loans saved the day! In seconds, I was approved with exceptional terms and fixed interest.”
– Ryan
“I was able to pay off multiple high-interest cards. Now I have one low, predictable monthly payment. The entire process was smooth, transparent, and stress-free.”
- Lisa
“This is my second review but it is worth raving about. Very quick, very thorough, completely perfect.”
– Gail
“The better interest rate was what drove me to work with Rocket Loans. Thank you for helping me escape predatory banking practices.”
– Phil
“I was able to pay off multiple high-interest cards. Now I have one low, predictable monthly payment. The entire process was smooth, transparent, and stress-free.”
- Lisa
“My FICO Scores are great. But even people with good credit need to consolidate debt. Rocket Loans saved the day! In seconds, I was approved with exceptional terms and fixed interest.”
– Ryan
“This is my second review but it is worth raving about. Very quick, very thorough, completely perfect.”
– Gail
Why people choose Rocket Loans
Why people choose Rocket Loans
Low fixed rates
Funds as soon as today
No hidden fees or early payoff penalties
Powered by Cross River Bank, member FDIC
Powered by Cross River Bank, member FDIC
All personal loans from Rocket Loans are made by Cross River Bank, a New Jersey state chartered commercial bank, Member FDIC, Equal Housing Lender.
All personal loans from Rocket Loans are made by Cross River Bank, a New Jersey state chartered commercial bank, Member FDIC, Equal Housing Lender.
Explore offers with no risk to your credit score
Explore offers with no risk to your credit score
Explore offers with no risk to your credit score
Get the funds you need to pay off other balances as soon as today.
Get the funds you need to pay off other balances as soon as today.
Get the funds you need to pay off other balances as soon as today.
Get the funds you need to pay off other balances as soon as today.
Frequently asked
questions
Frequently asked
questions
Which is better for your credit score: a personal loan or a balance transfer?
According to Credit Karma, a personal loan may be the smarter move for your credit: “Either option may help your scores, although the personal loan may have a greater impact.”
If you don’t already have an installment account (such as a personal loan, mortgage, auto loan, or student loan), a personal loan comes with the benefit of diversifying your credit mix, which can have a positive impact on your credit score.
How can I calculate debt consolidation payments?
Our free debt consolidation calculator makes it easy. Enter up to 10 credit card balances or other debts, give us a rough idea of your credit score, and choose your preferred repayment timeline. You’ll see an instant preview of the fixed rate and payments you might qualify for.
What fees should I expect with a balance transfer or personal loan?
Most balance transfers require an upfront transfer fee of 3-5%. So, if you’re transferring a $10,000 balance to a card with a 5% transfer fee, your new balance will be $10,500. Personal loans may include an origination fee, which is an upfront fee deducted from your loan amount.
At Rocket Loans, we’re committed to transparency. We disclose all fees associated with your loan up front. When other lenders advertise personal loans with no fees, it may mean they’re replacing fees with a higher rate in order to make that money back. This means a no-fee personal loan could potentially cost you more over time compared to a loan with a modest fee and a lower rate.
What can a Rocket Loans personal loan be used for?
You can use Rocket Loans to consolidate debt into one fixed payment. You can also use it to finance home improvement projects, emergency repairs, major purchases, family expenses, travel, a new or used vehicle, and more – all with no down payment.
A personal loan from Rocket Loans cannot be used to pay for student loans, illegal activities, or gambling.
Recommended: The best reasons for a personal loan
All loans are made by Cross River Bank, a New Jersey state chartered commercial bank, Member FDIC, Equal Housing Lender. All loans are unsecured, fully amortizing personal loans. Eligibility for a loan is not guaranteed. This is not a deposit product. Please refer to our disclosures and licenses page for state-required disclosures, licenses, and lending restrictions.
Qualified clients using Rocket Loans will see loan options for a 36 or 60 month term, and APR ranges from a minimum of 7.99% (rate with autopay discount) to a maximum of 29.99% (rate without autopay discount) depending upon their credit profile. An origination fee of up to 9.99% is charged for each loan. This fee is deducted from the balance before funds are disbursed to the client. For example, a 5-year $16,000 loan with a 14.55% interest rate and a 6.95% ($1,112) origination fee would have 59 scheduled monthly payments of approximately $376.83 and 1 final monthly payment of approximately $399.09 for an APR of 17.90%. Borrower must be a U.S. citizen or permanent U.S. resident at least 18 years of age. All loan applications are subject to credit review and approval and offered loan terms depend upon credit score, requested amount, requested loan term, credit usage, credit history and other factors. Not all borrowers receive the lowest interest rate or highest loan amount. To qualify for the lowest rate, you must have excellent credit, meet certain conditions, and select autopay. Autopay must be selected as the repayment method at the time the loan closes in order to receive the rate discount. Rates and Terms are subject to change at any time without notice.
The Ohio laws against discrimination require that all creditors make credit equally available to all credit worthy customers, and that credit reporting agencies maintain separate credit histories on each individual upon request. The Ohio Civil Rights Commission administers compliance with this law.
Married applicants may apply for a separate account.
Clients featured in imagery are clients of the Rocket family of companies and may not be clients of Rocket Loans.
Same Day Funding available for clients completing the loan process and signing the Promissory Note by 4:00PM ET on a business day. Also note, the ACH credit will be submitted to your bank the same business day. This may result in same day funding, but results may vary and your bank may have rules that limit our ability to credit your account. We are not responsible for delays which may occur due to incorrect routing number, account number, or errors of your financial institution.
Please refer to our terms of use for additional terms and conditions, and to Rocket Loans' privacy notice and Cross River's privacy notice to learn more about what we do with your personal information. For California residents, please see the California financial privacy opt-out form.