Personal loan balances have hit a $281 billion record — a 20-year high — rising 9% in a year and making them the fastest-growing form of consumer debt. With inflation at 3.4%, more Americans are leaning on these loans to manage costs, and over half of borrowers use them to consolidate existing debt, according to a LendingTree survey.
Analysts say the math can work, since personal loan rates average around 12% versus credit card rates that often exceed 20%. But experts caution that paying off cards with a loan, then charging those cards again, creates a dangerous double layer of debt.
