Debt Consolidation Calculator
Enter your current debts and a proposed consolidation loan to instantly see if combining your debts into one payment will save you money. This calculator compares your monthly payments, total interest, and payoff timelines side by side.
Quick examples:
Many personal loans charge a 1-8% fee
Consolidation Saves You Money
Total Interest Savings
Monthly Savings
Time Saved
Current Blended APR
Effective APR (Consolidated)
Break-Even Month
Total Cost (Current)
Current Debt Payoff Summary
| Debt | Balance | Payoff | Interest |
|---|---|---|---|
| Credit Card 1 | $5,000.00 | 4 years, 6 months | $3,045.29 |
| Credit Card 2 | $3,000.00 | 4 years | $1,297.58 |
| Total | $8,000.00 | 4 years, 6 months | $4,342.87 |
Side-by-Side Comparison
Payoff Timeline
Related Calculators
How This Calculator Works
Juggling multiple debts with different interest rates and payment dates can be overwhelming. This calculator helps you determine whether combining all of those obligations into a single consolidation loan will save you money, reduce your monthly payment, or shorten your path to becoming debt-free.
Current Debt Projection
For each debt: simulate month-by-month payoff at its rate and payment
The calculator projects each debt individually using its current balance, interest rate, and monthly payment. It tracks how long each debt takes to pay off and how much total interest you'll pay across all of them.
Consolidation Loan Comparison
PMT = P * [r(1+r)^n] / [(1+r)^n - 1]
The consolidation loan uses standard amortization to calculate a fixed monthly payment. The loan amount equals the sum of all your existing debt balances, optionally including an origination fee.
Weighted Average APR
weightedAPR = SUM(balance_i * rate_i) / SUM(balance_i)
Your blended rate is calculated by weighting each debt's interest rate by its balance. This gives you a single number to compare against the consolidation loan rate and tells you whether you're getting a better deal.
Origination Fee Impact
effectiveAPR accounts for fee rolled into balance or paid upfront
If the consolidation loan includes an origination fee, the calculator shows the effective APR — the true annual cost including the fee. This is critical for an honest comparison against your current rates.
Debt Consolidation Strategies
Compare the Effective Rate, Not the Stated Rate
Lenders advertise the stated APR, but origination fees increase your true borrowing cost. A 10% loan with a 5% origination fee costs more than a 12% loan with no fee on a short term. Always look at the effective APR this calculator provides to make a fair comparison against your current blended rate.
Keep the Term as Short as You Can Afford
A lower monthly payment feels appealing, but stretching the term from 36 to 72 months can double your total interest. Choose the shortest term where the monthly payment is still comfortably within your budget. Even a few months shorter can save hundreds of dollars in interest charges.
Don't Run Up New Balances
The biggest risk with consolidation is using it to free up credit card limits and then spending on those cards again. Once you consolidate, treat the paid-off cards as off-limits or close them if you lack the discipline. Otherwise, you'll end up with both the consolidation loan and new credit card debt.
Shop Multiple Lenders
Rates and fees vary significantly between lenders. Banks, credit unions, and online lenders all offer personal loans with different terms. Many allow you to check your rate with a soft inquiry that won't affect your credit score. Compare at least three offers before deciding, and use this calculator to model each one.
Common Use Cases
Credit Card Debt Consolidation
Save 30-50% on interestThe most common use case. Credit cards often carry rates of 18-28%, while personal loans may offer 8-15%. Consolidating three or four high-rate credit cards into a single fixed-rate loan can save thousands in interest and give you a clear payoff date instead of revolving indefinitely.
Mixed Debt Simplification
One payment, one dateWhen you have a mix of credit cards, a personal loan, and perhaps a medical bill, managing multiple due dates and minimum payments is stressful. A single consolidation loan replaces all of them with one payment on one date, reducing the chance of missed payments and late fees.
High-Balance, Long-Term Payoff
Cut payoff time in halfIf you owe $25,000 or more across multiple debts and are only making minimum payments, your payoff timeline could stretch 15-20 years. Consolidating into a 5-year fixed loan dramatically shortens your payoff and can cut total interest by more than half.
Pre-Mortgage Debt Cleanup
Improve DTI ratioBefore applying for a mortgage, reducing your debt-to-income ratio is critical. Consolidating revolving debts into a fixed installment loan lowers your credit utilization and can improve your credit score, potentially qualifying you for a better mortgage rate.
What This Calculator Assumes
To produce clear, comparable results, this calculator makes several simplifying assumptions. Understanding these will help you interpret the numbers accurately and decide how they apply to your specific situation:
- •Fixed interest rates: All interest rates remain constant throughout the payoff period. In reality, variable-rate debts or promotional rates that expire could change your results. For debts with variable rates, use your current rate as a reasonable estimate.
- •Constant monthly payments: Your monthly payment on each existing debt stays the same until that debt is paid off. Credit card minimum payments typically decrease as the balance drops, but this calculator uses whatever fixed amount you enter.
- •Standard amortization: The consolidation loan uses a standard fixed-payment amortization schedule. Each month, you pay the same amount, with the split between principal and interest shifting over time.
- •Monthly compounding: Interest on all debts compounds monthly. This is the standard for most consumer loans and credit cards in the United States.
- •No additional charges: The calculations do not include late fees, prepayment penalties, taxes, or other ancillary costs. These can affect your real-world results, so factor them in when making your final decision.
- •Loan equals total balances: The consolidation loan amount is automatically set to the sum of all your existing debt balances. This assumes you are consolidating the full amount of every debt.
Disclaimer: This tool provides estimates for personal financial planning purposes only. It is not financial advice. Results are based on the assumptions listed above and may differ from actual loan terms. For significant financial decisions, consider consulting with a qualified financial advisor or credit counselor who can account for your complete financial picture.
Frequently Asked Questions
How does the debt consolidation calculator work?
This calculator compares two scenarios: paying off your current debts individually at their existing rates and payments, versus taking out a single consolidation loan to pay them all off at once. It projects the month-by-month payoff for each scenario, calculating total interest paid, monthly payment amounts, and time to become debt-free. The comparison shows whether consolidation saves you money overall and how much your monthly payment changes. All calculations use standard amortization formulas and assume fixed interest rates throughout the payoff period.
When does debt consolidation make sense?
Debt consolidation typically makes sense when the interest rate on the new loan is significantly lower than the weighted average rate of your existing debts, and the loan term is not so long that it offsets the rate savings. A good rule of thumb is that consolidation is beneficial when you can reduce your blended APR by at least 2-3 percentage points. However, you should also factor in origination fees — if the fee eliminates your interest savings, consolidation may not be worth it. The calculator shows all of these comparisons so you can make an informed decision.
What is a weighted average APR and why does it matter?
Your weighted average APR is the blended interest rate across all your debts, where each rate is weighted by the size of that debt. For example, if you owe $10,000 at 24% and $5,000 at 12%, your weighted average APR is 20% — not the simple average of 18%. This matters because it gives you a single number to compare against a consolidation loan rate. If the consolidation rate is lower than your weighted average APR, consolidation is likely to save you money on interest. The calculator computes this automatically from the debts you enter.
How do origination fees affect my consolidation loan?
Many personal loans charge an origination fee, typically 1% to 8% of the loan amount. This fee can be paid upfront at closing or rolled into the loan balance. When rolled into the loan, you are essentially borrowing more money, which increases your monthly payment and total interest paid. The calculator models both scenarios and shows you the effective APR — the true annual cost including the fee. Always compare the effective APR (not just the stated rate) against your current weighted average APR to get an accurate picture.
Can consolidation actually cost me more money?
Yes, in several situations. If the consolidation loan has a higher interest rate than your current blended rate, you will pay more in interest. Even with a lower rate, if you extend the repayment term significantly (for example, from 3 years to 7 years), the total interest over the life of the loan can exceed what you would have paid on your original debts. Origination fees can also tip the balance. The calculator flags these scenarios with clear warnings so you can see exactly when consolidation helps versus hurts.
What is the break-even month and why does it matter?
The break-even month is the point at which the cumulative payments on your consolidation loan become less than the cumulative payments you would have made on your existing debts. Before this month, you have actually spent more on consolidation (especially if there is an upfront origination fee). After this month, consolidation starts saving you money with each passing payment. If the break-even month is very late in the loan term, the net benefit of consolidation is small. This metric helps you understand how quickly you start benefiting from the switch.
What types of debt can I consolidate?
You can consolidate virtually any unsecured debt, including credit card balances, personal loans, medical bills, payday loans, and other lines of credit. Some people also consolidate secured debts like auto loans, though this changes the risk profile since you are replacing a secured debt with an unsecured one (or vice versa). The calculator works for any combination of debts — simply enter each debt with its balance, rate, and current monthly payment. The most common use case is consolidating high-interest credit card debt into a lower-rate personal loan.
Does debt consolidation hurt my credit score?
Applying for a consolidation loan triggers a hard inquiry on your credit report, which can temporarily lower your score by 5-10 points. However, consolidation can actually improve your credit over time in several ways: it reduces your credit utilization ratio (a major scoring factor) by paying off revolving credit card balances, it simplifies your payments making it less likely you will miss one, and it converts revolving debt to installment debt which can improve your credit mix. Most people see their score recover and improve within a few months of consolidating, as long as they make timely payments and avoid running up new balances on the paid-off credit cards.
Should I consolidate if I can only get a slightly lower rate?
Even a small rate reduction can produce meaningful savings, especially on larger balances over longer terms. For example, reducing your rate from 22% to 18% on $20,000 of debt over 4 years saves approximately $3,500 in interest. However, you need to factor in origination fees and ensure the loan term is not significantly longer than your current projected payoff timeline. Use this calculator to enter your exact numbers — sometimes even a 1-2% rate reduction produces worthwhile savings, while other times the origination fee erases the benefit entirely.
What if my monthly payment on some debts is just the minimum?
Minimum payments on credit cards are typically calculated as 1-3% of the outstanding balance or a fixed floor amount (usually $25-$35), whichever is greater. The problem with minimum payments is that they are mostly interest — very little goes toward the principal, leading to payoff timelines of 15-30 years. Enter whatever you are currently paying each month, even if it is the minimum. The calculator will project how long each debt takes to pay off at that rate, giving you an accurate comparison against the consolidation loan. In many cases, consolidation with a fixed term is dramatically faster than paying minimums on credit cards.