A consolidation loan offers several advantages: Lower interest rates: Typically, personal loans charge far lower interest rates than credit cards do. The loan interest rate is fixed, whereas credit card rates are variable, so a consolidation loan won’t surprise you with a rate hike. On the other hand, credit card interest rates sometimes go down, but this seems to be a relatively rare occurrence. One monthly payment: If you have two or more credit cards, you juggle various payment due dates and minimum payment amounts. A consolidation loan replaces these with just one monthly payment, and the payment amount is always the same, helping you better plan your monthly cash flow. Longer repayment term: The duration of a consolidation loan is potentially much longer than that of a credit card, meaning your monthly payments can be lower than the credit card minimum payments. Two disadvantages to bear in mind: Requires discipline: A consolidation loan only makes sense if you stop accumulating balances on your credit cards until you repay the loan. You should only use your credit cards to the extent that you can repay them in full on the next billing date. Letting balances accumulate will put you in an even worse situation than before, as you will also be paying off your consolidation loan. If you can’t muster the discipline to control your credit card use, a consolidation loan is not your best remedy.