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3-Year vs. 5-Year Loan: Which Term Is Better for Credit Card Debt Consolidation?

Choosing between a 3-year or 5-year personal loan to consolidate credit card debt?

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By

Michael Bowley

Updated

Fact checked

Key takeaways

  • 3-year loans: faster payoff and lower total interest, but requires higher monthly payments
  • 5-year loans: lower monthly payments and easier cash flow, but cost more interest over time
  • Use our calculators to estimate your own monthly payment, total cost and payoff timeline
  • Decide by balancing payment size, interest savings, credit score impact and prepayment flexibility

Learn how each term affects your monthly payments, total interest and debt payoff timeline — and how to pick the right option for your budget. You can also explore five ways to consolidate credit card debt if you’re still considering your options.

Compare 3-year vs. 5-year personal loans for debt consolidation

Here’s how a 3-year loan and 5-year loan stack up when you’re using it to consolidate credit card debt. To see which lenders offer competitive rates, check out our best debt consolidation loans.

Loan termProsCons
3 yearsPay less interest, faster debt payoffHigher monthly payments may strain your budget
5 yearsLower monthly payments, easier to manage cash flowPay more in interest over the life of the loan

Example: How much could you save?

Let’s say you have $10,000 in high-interest credit card debt and you’re considering a personal loan to consolidate it. Want to run your own numbers? Try our debt consolidation calculator or credit card payoff calculator.

3-year loan at 12% APR5-year loan at 14% APR
Monthly payment$332$233
Total interest paid$1,940$3,980
Total cost$11,940$13,980

3-year vs. 5-year loan calculator

Use the sliders to estimate your monthly payments and total cost for 3-year and 5-year personal loans.







Term Monthly Payment Total Interest Total Cost
3-Year Loan
5-Year Loan
Lowest monthly payment Lowest total cost

How to decide which personal loan term is right for you

Choose a 3-year loan if:

  • You want to pay off your debt faster
  • You can afford a higher monthly payment
  • You’re focused on minimizing interest costs

Choose a 5-year loan if:

  • You need lower monthly payments to fit your budget
  • You’re consolidating a large balance or have a lower income
  • You want predictable payments over a longer period

Key factors to consider when consolidating credit card debt

  • Total interest paid:A longer term spreads out the debt but increases your interest charges.
  • Credit score impact:Consolidating multiple credit cards into one loan can help your credit score — as long as you make on-time payments and don’t rack up new credit card debt.
  • Prepayment flexibility:Look for a lender that doesn’t charge fees if you pay off your loan early.
  • APR range:Your interest rate depends on your credit history, debt-to-income ratio and the lender you choose. If you’re not sure where to start, try our personal loan calculators.

Bottom line: Match your loan term to your budget and goals

A 3-year debt consolidation loan can help you get out of credit card debt faster and save on interest — but it requires higher monthly payments. A 5-year loan may be easier on your budget, though you’ll pay more over time.

The best personal loan for credit card consolidation is the one you can afford without falling behind. You can compare top-rated personal loans to find the right fit for your needs.

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Written by

Head of Publishing

Michael Bowley is the Head of Publishing at Finder, boasting a remarkable six-year journey at the forefront of digital content. First starting at Finder as an Assistant Publisher, he swiftly became the Publisher of Finder's shopping niche where he created gift guides and provided savvy shopping insights, helping readers save money and find the best deals. Before taking on the role of SEO Manager, he served as the Publishing Innovations Manager where he helped develop new products and services. His experience in SEO management led him to steer Finder's content strategy, driving remarkable organic growth. Today, as the Head of Publishing, Michael curates dynamic content, empowering users to make informed financial decisions. See full bio

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