Look, I despise me some debt. I hate it. In fact, I’d argue it’s the biggest obstacle to living life on your own terms.

But sometimes…

Yeah, I’m going there. Sometimes, you can actually use debt to your benefit. *(GASP!) And while I don’t want to serve a drink to a drunk, when you’re trying to pay off debt, certain types of loans can actually help you get in front of the interest you’re paying. You can actually get out of debt faster by using…well…debt.

Heck, I’ve even done it myself. Back in my early to mid-20s, I had a little bit of credit card debt. Not much, mind you, but still a couple of thousand dollars. And, in order to stay ahead of the game, I had to keep using one credit card to pay off another. Bad move.

Once Holly saw what I was doing, she gave me a little slap on the wrist and set me on the right course. I transferred by debt, got out in front of my interest, and we paid the debt off together over just a few months. But…I had to get a little shifty with my debt in order to do it.

The Rules

If you’re going to use a loan to get out in front of your debt, you have to play by the rules. If not, you’ll find yourself deeper in debt and worse off than you were before. It’s SUPER important that you stick to these two rules. If not, seriously, please stop reading now.

OK. Here goes.

  1. Commit to paying off your debt. – In my opinion, the only reason you should consolidate debt into one loan is to pay it off. Period. Never, ever, EVER use it as as a way to open up more credit to buy more stuff you can’t afford. If you do, you’ll find yourself hurting….like sooooo bad.
  2. Pay more than the minimum. – Getting better terms and a lower rate can help you destroy your debt fast. If you are in some serious dire straits, you can use it to give yourself a little break on the monthly payment. But – and this is a BIG but – you should ONLY do that if there is literally nothing left in your budget to cut. Otherwise, don’t worry about the breathing room. Cut your expenses and use this the lower payment to your advantage! Pay more than the minimum, especially if it’s on a balance transfer card, so that you can actually get out of debt faster.

3 Types of Loans You Can Use to Get Ahead

Balance Transfer Cards

If you have credit card debt, one of my favorite types of loans to use is a balance transfer card. This little trick is how I handled my credit card debt back in the day, and it worked wonders.

By transferring your debt, interest on the card will actually be put on hold for an introductory period of between 12-21 months. You MUST take full advantage of that break by paying more than the minimum amount due…like seriously. If you do, it can help you crawl out of credit card debt once and for all. If not…well, you’re probably going to find yourself worse off than you were.

Currently, we recommend using the Citi Diamond Preferred® Card. The introductory 0% APR for balance transfers and purchases lasts a whopping 18 months. There is a 3% balance transfer fee (minimum of $5) to pay when you transfer your balance.

Find more of our favorite balance transfer cards here.

Use a Personal Loan

For larger balances, or for consolidating more than one type of debt, a personal loan is definitely an option. You can generally get personal loans from any bank, and they can definitely be handy if you’re trying to get ahead. By getting a better rate, you can easily save thousands of dollars over the course of your loan. And, when the amount of interest you pay each month is smaller, it makes it that much easier to get ahead faster.

If you’re looking for a traditional personal loan, one of our favorite banks is SoFi. With great rates starting at 5.99% APR* on fixed loans (with AutoPay), you’ll start saving on your high-interest debt almost immediately. They offer no origination fees, so you’re not paying to get the loan started. Plus, they have flexible 2 to 7 year term options. The $5,000 minimum could be a barrier for some (and it’s a $10,000 minimum for California residents), but you have the option of consolidating up to $100,000 in debt. Read Here to Learn More about SoFi.

The Bottom Line

Using these types of loans to get ahead can be a great way to reduce the amount you pay toward interest each month. Of course, using debt to pay off debt can be a dangerous game if you don’t do it right. Make sure you’re ONLY using it to assist in your debt repayment efforts and not as an excuse to spend more than you make. When used wisely, a balance transfer card or debt consolidation loan can help you get ahead and pay off your debt even faster! Once you have your head above water and are ready to be responsible with credit cards, there are perks out there that will actually save you money, such as using a travel rewards credit card, earn points and earn flights, hotels, trips for a lot less than actual cost!


Have you ever used any of these types of loans to consolidate your debt? Did it work? Let us know in the comments below!

*SoFi Disclaimer