Debt Consolidation Calculator
Compare your current combined debt payments against a single consolidation loan to see monthly savings and total interest saved.
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How to use this calculator
P_total = total debt consolidated, r = monthly consolidation rate, n = consolidation term in months.
- 1
Enter the balance and interest rate for each of your existing debts (up to three).
- 2
Enter the interest rate and term offered by the consolidation loan.
- 3
Compare the new monthly payment against your combined current payments.
- 4
Review the estimated total interest saved to decide if consolidation makes sense.
Frequently asked questions
When does debt consolidation save money?
When the consolidation loan rate is meaningfully lower than your current weighted average rate. If your debts average 20% APR and you qualify for a 10% personal loan, consolidation cuts your interest cost roughly in half. Always compare the total interest paid over the full terms, not just monthly payments.
Does consolidation hurt my credit score?
Opening a new loan causes a small temporary dip from the hard inquiry. Paying off revolving credit cards lowers your credit utilization ratio, which helps your score. Net effect over 6–12 months is usually neutral to positive — provided you don't run up the credit cards again.
What is the risk of consolidation?
The main risk is re-accumulating the original debts after consolidation. Many people clear their cards and then charge them again, ending up with both the consolidation loan and new card balances. Cut or freeze the cards to prevent this.
Is a balance transfer better than a consolidation loan?
A 0% APR balance transfer card is excellent if you can pay off the balance within the promotional period (typically 12–21 months). For larger balances or longer payoff timelines, a personal consolidation loan at a fixed rate is more predictable. Watch for balance transfer fees (typically 3–5%).
Is debt consolidation the right move?
How to qualify for a low-rate consolidation loan
The best consolidation rates go to borrowers with credit scores above 720. Improve your chances by paying bills on time, reducing credit utilization below 30%, and disputing any errors on your credit report before applying. Credit unions often offer lower rates than banks for personal loans.
Secured vs unsecured consolidation
Unsecured personal loans require no collateral but carry higher rates. Home equity loans or HELOCs offer much lower rates (secured by your home) but risk foreclosure if you default. For credit card debt, prefer an unsecured option — converting unsecured debt into a secured debt backed by your home adds significant risk.
Debt management plans as an alternative
Non-profit credit counseling agencies offer Debt Management Plans (DMPs) where they negotiate lower rates with creditors and you make a single payment to the agency each month. DMPs don't require good credit (beneficial if rates are too high for a consolidation loan) and typically close the enrolled accounts to prevent new spending.
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Results are estimates for informational purposes only and do not constitute professional financial, medical, legal, or technical advice. Read full disclaimer →