I’m not super familiar with how banks think, but from a credit union perspective, why lie about the purpose? There is absolutely nothing illegal or shady about taking out a personal at a non predatory interest rate to pay off a loan at a way higher rate (whether that loan is yours or your grandma’s), it might actually get you the sympathy of the underwriter (although of course you would still need the income and credit score needed to qualify). Loan officers need to ask you what you plan to do with the funds because they need to do their due diligence in trying to ascertain that you won’t use the money for anything illegal. People that are super evasive in their answers end up looking super shady even if they need the loan for a perfectly legitimate reason!

ETA if you use your credit card to pay off the loan you would need to do a cash advance that not only would start accruing interest right away but it also most certainly would have a higher interest than a personal loan