It’s a Catch-22: You want to make progress on paying off your debt but, in order to do so, you take out yet another loan.

A new study from online lending company LendingTree finds that people are using personal loans to do exactly that: manage existing debt.

That comes as outstanding personal loans have reached more than $125 billion in combined balances. And the tally of personal loans today is about 20 million, according to LendingTree.

Meanwhile, total credit card debt has climbed to more than $1 trillion.

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Most personal loan requests — 61 percent — are aimed at helping people get some wiggle room on their debts, LendingTree found.

The No. 1 reason people take out personal loans is debt consolidation, followed by credit card refinancing, the company’s research found.

Consumers who applied for personal loans to manage their debts were also starting out with the highest balances. The average is $14,107 for credit card refinancing and $12,670 for debt consolidation.

The research also found that individuals with fair to good credit – or credit scores from 600 to 749 – are most likely to want to take personal loans to help manage their debts.

Those who have high credit scores and low credit scores were least likely to pursue personal loans.

Personal loans can have both advantages and disadvantages for borrowers.

If you have multiple accounts, taking out a personal loan can be an opportunity to consolidate that debt into one account and possibly get a lower interest rate.

But in order to knock off those balances for good, you need to have a concrete plan for repaying them.

While personal loans typically charge less than credit cards, it might make more sense to save up and pay for new purchases with cash instead.

LendingTree’s research is based on data from borrowers who sought personal loans on its platform in 2018.

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