π§Ύ Debt Consolidation Calculator
Compare your debts today against one consolidation loan, side by side.
Consolidation vs Paying Separately
Estimates for planning only, not financial advice.
How to Use This Calculator
List every debt you would roll into the consolidation loan: the balance, its APR, and what you actually pay per month on it. Then enter the consolidation loan\'s APR and term. The calculator simulates both plans month by month and shows which one costs less in total interest.
Enter each debt: Balance ($), APR (%), and Monthly Payment ($). Three example debts are prefilled; use Add debt or Remove last to match your real list (up to 6).
Enter the Consolidation Loan APR you could get, with its Term in years. Be honest about the rate: a pre-approval quote beats a guess.
Read the comparison: total interest paid separately versus with the consolidation loan, the weighted rate of your current debts, both payoff times, and the new single payment.
Before you act, subtract the loan\'s fees (origination or balance-transfer fee) from the interest savings, and check that you will not run the old cards back up.
The Math Behind the Comparison
The calculator does not use a shortcut formula for your current debts, because each debt has its own rate and payment. It simulates every debt month by month: add that month\'s interest, subtract your payment, and repeat until the balance hits zero. Total interest is the sum across all debts, and the payoff time is the longest-lived debt. The consolidation loan is a standard amortizing payment on the combined balance, so its total interest is exact. Comparing totals, not payments, is the whole point: a lower monthly payment that stretches years longer can cost more overall.
Worked Example
Three debts: $8,000 at 19 percent paying $220/month, $5,000 at 15 percent paying $140/month, and $3,000 at 12 percent paying $90/month. Total balance = $16,000. Weighted APR = (8000 x 0.19 + 5000 x 0.15 + 3000 x 0.12) / 16000 = 16.44 percent. Paid separately, the debts cost $6,340.82 in total interest and the longest takes 55 months to clear. Consolidate into a $16,000 loan at 10 percent for 4 years (48 months): monthly payment = $405.80, total interest = $3,478.46. Savings = $6,340.82 - $3,478.46 = $2,862.36, and everything is paid off 7 months sooner.
When Consolidation Backfires
Three traps turn a good consolidation into an expensive mistake. First, fees: a 5 percent balance-transfer fee or a 4 percent origination fee is charged on day one and can erase a year of interest savings. Second, term extension: refinancing 3 years of remaining payments into a 7-year loan lowers the payment but usually raises total interest, even at a lower rate. Third, and most common, the cleared cards become spending room again, and two years later you owe the consolidation loan plus new card balances. Consolidation fixes the math; only a spending plan fixes the cause.
Alternatives worth pricing before you commit: the avalanche method (throw every spare dollar at the highest-rate debt while paying minimums on the rest) costs the least interest of any strategy, and a 0 percent balance-transfer card can beat a loan if you can pay the balance within the promo window. Estimates for planning only, not financial advice.
Frequently Asked Questions
What is the weighted average interest rate?
The weighted average rate blends all your debts into one number by weighting each rate by its balance: sum of (balance x rate) divided by total balance. If you owe $8,000 at 19 percent, $5,000 at 15 percent, and $3,000 at 12 percent, the weighted rate is 16.44 percent. A consolidation loan beats your current setup only if its rate is meaningfully below that weighted number after fees.
When is debt consolidation a good idea?
It works best when you can replace high-rate balances with a clearly lower rate, and when the new monthly payment is one you can actually sustain. It also helps if the single payment stops you from missing due dates. It is a bad idea if the new rate is not lower, if fees eat the savings, or if you plan to run the credit cards back up after consolidating, which leaves you with twice the debt.
Does consolidation save money or just simplify payments?
It can do both, but the two are separate. The savings come only from a lower weighted rate or a shorter payoff time. Extending the term, say from 3 years of credit card minimums to a 5-year personal loan, can lower the payment while raising total interest. Always compare total interest, not just the monthly payment, which is exactly what this calculator shows.
What fees should I watch for?
Balance transfer cards often charge 3 to 5 percent of the transferred amount, personal loans may carry a 1 to 6 percent origination fee, and home equity options add closing costs and put your house at risk. A 3 percent fee on $16,000 is $480 of instant cost. Subtract fees from the projected interest savings before deciding the move is worth it.
Will consolidation hurt my credit score?
Applying creates a hard inquiry, which dings the score slightly for a few months. But paying off several maxed-out cards with one installment loan usually lowers your credit utilization and diversifies your account mix, which helps the score over time. The biggest risk is behavioral: new available credit tempts new spending, and that undoes the whole plan.