Worked example: $5,000 of card debt
A 3% fee on $5,000 is $150.00. Moved to a card with 0% for 18 months and cleared in that time, the payment is $286.11 a month and the whole cost is the fee. A 12% loan over three years with a 5% origination fee means borrowing enough to receive $5,000: the payment is $174.81 a month and the loan costs $1,293.24 in interest and fees. The balance transfer costs $1,143.24 less.
Without the loan fee
With no origination fee the loan has a payment of $166.07 and costs $978.58 in interest, and the transfer still costs $828.58 less. If you pay the transfer card only the loan's $166.07 a month, $2,160.71 is still owed when the 18 months end, and the card then charges its regular rate.
Fees and ranges
Credit Karma gives balance transfer fees of 3% to 5% of the amount (minimum $5 or $10) and loan origination fees of 0% to 8%; NerdWallet gives 1% to 10% for loans and intro periods of usually 15 to 21 months. These are market ranges, not rules, so every fee and rate here is an input you can change. The calculator takes the larger of the percentage fee and the minimum fee; on a $100 debt a 3% fee is $3, so the $5 minimum applies.
Under Regulation Z 1026.53, payments above the minimum generally go to the highest-APR balance first. If you carry other balances on the transfer card, a promotional balance can be paid last.
When each one tends to win
NerdWallet suggests a transfer card for smaller debts you can clear inside the intro period, usually with good to excellent credit, and a loan for larger or mixed debts over two to seven years with any credit tier. Compare the cost lines above with your own offers, and use a soft-pull prequalification where a lender offers one before applying.
US rates are nominal annual rates (Regulation Z Appendix J), so each rate is divided by 12 for the monthly rate.
To see what a transfer saves against your current card, use the balance transfer loan calculator.
To compare a loan with leaving the debt on a card, use the credit card vs personal loan calculator.
Use the right country page
This page uses US terms, dollars and the nominal rate convention. For a UK comparison, with pounds and the effective APR convention, choose United Kingdom above the form. Inputs reset and amounts are not converted.
Inputs for the US balance transfer vs personal loan calculator
Debt to clear
The card debt you want to move or pay off, before any fees.
Balance transfer fee and minimum fee
A percentage of the debt moved and the smallest fee the card charges. The larger applies.
Promotional rate and period
The intro APR on the transferred balance and how many months it lasts.
Card APR after the promotion
The rate on whatever is left once the intro period ends.
How you would pay the transfer card
Enough to clear it inside the intro period, or only the same monthly payment as the loan.
Personal loan interest rate, term and origination fee
The note rate and term on the offer, and the fee taken out of the loan.
CALCULATOR QUESTIONS
US balance transfer vs personal loan calculator questions
Is a balance transfer cheaper than a personal loan?
When you can clear the debt inside the intro period, usually. On $5,000 the transfer costs $150.00 in fees and the 12% loan with a 5% fee costs $1,293.24 in the example.
What if I cannot clear the card in the intro period?
The balance left is charged at the regular APR. Paying only the loan's payment leaves $2,160.71 after 18 months in the example.
How are the fees counted?
The transfer fee is added to the new balance. The loan's origination fee is taken from the loan, so you borrow more to receive the amount you need.
Do both affect my credit?
Both usually involve a hard inquiry when you apply. Some lenders let you prequalify with a soft pull first.
Which rate convention does it use?
The nominal convention: each rate divided by 12 for the monthly rate.