Need to borrow money or pay down debt? Personal loans, credit cards and home equity lines all work, but they work very differently. Here’s a quick guide to which fits when.

Personal loan

A lump sum with a fixed payment and a set end date. Usually unsecured, so your home or car isn’t on the line. The average rate on a 24-month personal loan at banks was 11.90% in August 2026.¹

Best for: a one-time expense or paying off higher-rate cards on a clear schedule.

Credit card

Flexible, but expensive if you carry a balance. Accounts that were charged interest averaged 22.36% in August 2026.¹ A 0% balance transfer offer can be cheaper for a while, but there’s usually a transfer fee and the rate rises when the promo ends.²

Best for: purchases you can pay off in full, or a balance you can clear before a 0% promo ends.

HELOC

A credit line backed by your home. The big difference is the risk: you could lose your home if you can’t repay, and closing costs can be significant.²

Best for: homeowners with steady income and a big, planned expense like a renovation.

Quick comparison

• Lowest risk to your home: personal loan or credit card
• Most predictable payment: personal loan
• Most flexible: credit card or HELOC
• Most expensive if you carry a balance: credit card

Run your own numbers with our personal loan calculator.

Leaning toward a personal loan? Check your rate (paid link)

Sources

1. Consumer Credit, G.19, Federal Reserve Board, released October 7, 2026 (August 2026 figures are preliminary).
2. What do I need to know about consolidating my credit card debt?, Consumer Financial Protection Bureau.

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