Worked example: £3,000 on a loan or a card
Borrowing £3,000 on a 9% APR loan over three years costs £94.91 a month and £416.74 in interest. Putting the same £3,000 on a card at 22% APR and paying £100 a month takes 42 months and costs £1,198.27 in interest. The loan costs £781.52 less.
The card would only match the loan if you paid about £227.66 a month, which clears it far faster than three years. Below that payment, the loan is the cheaper way to borrow.
Fixed payment, same payment or minimum only
Paying the card the same as the loan's £94.91 a month takes 46 months and costs £1,302.10 in interest. Paying only the minimum is far dearer: with a minimum of the month's interest plus 1% of the balance, never less than £5, the card takes 336 months and costs £4,809.12 in interest, so the loan saves £4,392.38.
UK card minimums are normally set at least at the month's interest plus 1% of the balance (FCA CONC 6.7.5R). Card agreements often add a floor, so the minimum share and the lowest amount are editable; check your own agreement.
When the card is cheaper
A card can win. With a 5% APR card paid £300 a month against a 15% APR loan over five years on £3,000, the card clears in 11 months for £69.17 of interest while the loan costs £1,193.69, so the card costs £1,124.52 less. A 0% purchase card cleared inside its offer beats any loan.
Other differences the numbers do not show
Credit card purchases between £100 and £30,000 are covered by section 75 of the Consumer Credit Act 1974, which makes the card provider jointly liable with the retailer if something goes wrong. An ordinary cash loan is not covered. A loan has a fixed term, which stops a balance lingering; a card is flexible, which makes it easy to keep spending on it. Both usually leave a search on your credit file.
Which interest rate convention is used
By default UK APRs are treated as effective annual rates under FCA CONC App 1.2, so the monthly rate is (1 + APR)^(1/12) − 1. A tool that divides the APR by 12 shows a slightly higher loan payment; at 9% over three years on £3,000 that is £95.40 instead of £94.91. Choose APR divided by 12 in the APR convention field to see the whole comparison that way: the loan then costs £960.97 less than the card on the default fixed payment, against £781.52 on the default basis.
To see how long a card takes to clear, use the credit card repayment calculator.
To compare a loan with a 0% transfer card, use the balance transfer vs personal loan calculator.
Use the right country page
This page uses UK terms, pounds and, by default, the UK effective APR convention. For a US loan, with an origination fee and the nominal rate convention, choose United States above the form to open the US credit card vs personal loan calculator. Inputs reset and amounts are not converted.
Inputs for the UK credit card vs personal loan calculator
APR convention
Applies to the loan APR and the card APR. Effective APR (FCA) is the default and follows the FCA APR rule. APR divided by 12 is how many UK sites work and gives a slightly higher monthly rate.
Amount to pay off
How much you need, or owe, which either the loan or the card would cover.
Personal loan APR and term
The APR on the loan quote and how many years it runs. Half years such as 2.5 are fine.
Credit card APR
The yearly rate on the card you would use.
How you would pay the card
A fixed amount each month, the same payment as the loan, or only the minimum.
Fixed card payment
Used when you pay a fixed amount. It must be more than the card's monthly interest.
Minimum payment settings
The share of the balance added to each month's interest, and the lowest amount the card asks for.
CALCULATOR QUESTIONS
UK credit card vs personal loan calculator questions
Is a personal loan cheaper than a credit card?
Usually, when the loan's APR is lower and you would take years to clear the card. On £3,000, a 9% loan over three years costs £416.74 in interest against £1,198.27 for a 22% card paid £100 a month.
How much do I need to pay the card to match the loan?
In the example, about £227.66 a month. Paying more than that makes the card the cheaper option.
What if I only pay the minimum?
The card takes far longer and costs far more. In the example it takes 336 months and £4,809.12 in interest.
Does the card offer any protection the loan lacks?
Purchases of £100 to £30,000 paid for on a credit card are covered by section 75 of the Consumer Credit Act 1974. A cash loan is not.
Why does another calculator show a different loan payment?
Some divide the APR by 12. UK APRs are effective annual rates, so this calculator uses (1 + APR)^(1/12) − 1 by default, which gives a slightly lower payment. Choose APR divided by 12 in the APR convention field to match those tools.