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Finance

Debt Consolidation Calculator

Compare your current multiple debts against a single consolidation loan. See if consolidating saves money and reduces monthly payments.

Current Debts

Consolidation Loan

What is Debt Consolidation Calculator?

The Debt Consolidation Calculator compares your current multiple debts against a single consolidation loan. It shows whether rolling all your balances into one loan at a lower rate will reduce your monthly payment and save money on total interest over the life of the debt.

How to use

  1. 1 Enter the balance, interest rate, and minimum monthly payment for each of your current debts.
  2. 2 Click Add debt to include additional accounts.
  3. 3 Enter the interest rate and term (in months) for the consolidation loan you are considering.
  4. 4 Compare the current monthly payment and total interest against the consolidated loan figures.
  5. 5 Review the savings panel to see how much you stand to save — or pay more — by consolidating.

Formula

Consolidation monthly payment = P x r(1+r)^n / ((1+r)^n - 1), where P is total balance, r is monthly rate, and n is term in months. Savings = current total interest - new total interest.

Example calculation

Three debts totaling $12,500 at an average effective rate of about 17% might cost $4,200 in total interest. Consolidating into a 48-month loan at 8% could reduce total interest to roughly $2,200, saving $2,000.

Frequently asked questions

When does debt consolidation make sense?

Consolidation typically makes sense when you can qualify for a loan rate meaningfully lower than your current average rate, and when you have the discipline not to run up new balances on the cards you pay off.

Will consolidating hurt my credit score?

Applying for a new loan triggers a hard inquiry, which may temporarily lower your score by a few points. Over time, consolidation can improve your score by reducing your credit utilization ratio.

What types of loans are used for consolidation?

Common options include personal loans, balance transfer credit cards (often with a 0% promotional period), home equity loans, and credit union loans. Each has different rates, fees, and risk profiles.

Why might my monthly payment be higher after consolidation?

If the consolidation loan has a shorter repayment term than your current debts, the monthly payment could increase even if the rate is lower. The calculator shows this trade-off clearly.

Does this calculator include origination fees?

The current version uses the loan amount and rate directly. If your consolidation loan has origination fees, reduce the loan amount by the fee amount to get a more accurate comparison.