How to use the debt consolidation calculator
- List your debts, one per line: balance, APR, the payment you make.
- Enter the consolidation loan: APR, term in months and origination fee.
- Compare the payments: what you pay now against the new single payment.
- Check the last row: the net saving after the fee, which can be negative.
- Try other terms: a shorter term raises the payment but cuts interest.
What the comparison measures
The left side is what you pay today: each debt amortised on its own at the payment you enter, with no rollover. The right side is a single loan large enough to clear all the balances after its origination fee, paid over the term you choose. The last row compares total interest plus the fee. A positive number means consolidation costs less overall. A lower monthly payment alone proves nothing, because a longer term can lower the payment and still cost more. This debt consolidation calculator shows both.
Worked example
Three cards totalling $14,900.00: $5,000 at 22.99%, $2,400 at 19.99% and $7,500 at 27.49%, paying $450.00 a month between them. Kept as they are, they take 68 months and cost $11,249.01 in interest. A 48-month loan at 12.9% with a 3% fee needs $15,360.82, costs $411.33 a month and $4,383.04 in interest. The net saving after the fee is $6,405.15.
Stretch the same loan to 84 months and the payment falls to $278.61, but the net saving drops to $2,745.84.
When consolidating helps and when it does not
It helps when the new APR is well below your average APR and you do not run the cards back up. It hurts when the term is much longer than you would have taken anyway, when the fee eats the saving, or when the new APR is only slightly lower. Compare against paying down the highest-rate card first with the debt payoff calculator; the avalanche method needs no new loan. For the loan's own schedule and true APR, see the personal loan calculator, and check the effect on your ratios with the debt to income calculator.
Limits
Your actual APR depends on credit and income, and some lenders only quote after a credit check. Credit utilisation changes when cards are paid off, which can raise your score, but this tool does not model scores. A balance transfer card with a 0% introductory rate is a different product; model it by entering 0 as the loan APR with its transfer fee and a term equal to the promotional period. Estimate only, not financial advice.
Method and sources
Current plan: each debt is simulated month by month with interest rounded to cents, then summed. Consolidation loan = total balance / (1 - fee share), paid with the standard amortization formula. No outside data is used.
Worked examples
| Example | Input | Result |
|---|---|---|
| Three card balances | Your debts: balance, APR, monthly payment (one per line): 5000, 22.99, 150 / 2400, 19.99, 80 / 7500, 27.49, 220; Consolidation loan APR (%): 12.9; Consolidation loan term (months): 48; Origination fee (% of the loan): 3 | Total balance to consolidate: $14,900.00; Consolidation loan needed: $15,360.82; Payments today: $450.00; New monthly payment: $411.33; Monthly payment change: -$38.67; Months to be debt-free today: 68; Interest if you keep your debts: $11,249.01; Interest on the consolidation loan: $4,383.04; Net saving after fees: $6,405.15 |
| Longer term, lower payment | Your debts: balance, APR, monthly payment (one per line): 5000, 22.99, 150 / 2400, 19.99, 80 / 7500, 27.49, 220; Consolidation loan APR (%): 12.9; Consolidation loan term (months): 84; Origination fee (% of the loan): 3 | Total balance to consolidate: $14,900.00; Consolidation loan needed: $15,360.82; Payments today: $450.00; New monthly payment: $278.61; Monthly payment change: -$171.39; Months to be debt-free today: 68; Interest if you keep your debts: $11,249.01; Interest on the consolidation loan: $8,042.34; Net saving after fees: $2,745.84 |
| Two debts, no fee | Your debts: balance, APR, monthly payment (one per line): 9000, 24.99, 300 / 3000, 17.49, 100; Consolidation loan APR (%): 9.5; Consolidation loan term (months): 36; Origination fee (% of the loan): 0 | Total balance to consolidate: $12,000.00; Consolidation loan needed: $12,000.00; Payments today: $400.00; New monthly payment: $384.40; Monthly payment change: -$15.60; Months to be debt-free today: 48; Interest if you keep your debts: $6,240.67; Interest on the consolidation loan: $1,838.23; Net saving after fees: $4,402.44 |
FAQ
Does debt consolidation lower my interest?
Only if the loan APR is lower than your current rates and the term is not much longer. The net saving row shows the answer after the origination fee.
Why can the payment be lower but the total cost higher?
A longer term spreads the balance out, so each payment is smaller but you pay interest for more months.
How do I enter a debt with a variable rate?
Use today's APR and your usual payment. The result is a snapshot, so recheck if your rate changes.
Is an origination fee added to the loan or taken out of it?
Here it is taken out of the proceeds, so the loan is sized to cover your debts plus the fee. If your lender adds it to the balance instead, set the fee to zero and add it to the debt list.
Will consolidation hurt my credit?
There is usually a small temporary dip from the credit inquiry and a new account. Paying off cards can lower utilisation later. This tool does not model credit scores.
Is there an alternative to a consolidation loan?
Yes: paying the highest-rate debt first (avalanche), a 0% balance transfer, or a nonprofit credit counselling plan. Compare them before borrowing.