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Debt Consolidation Calculator

Consolidating debt means replacing several balances with one loan at one rate and one payment. It can cut the interest bill sharply, and it also makes the month easier to manage. What it cannot do is reduce the balance: the same money still has to be repaid, and a long term at a lower rate can cost more in the end.

Use the minimum payment from each statement, not what you plan to pay.

Debt
Balance
APR %
Minimum

The rate you have been quoted on the new loan.

Fee as a percent of the balance, usually rolled into the new loan.

$

Leave at 0 to pay exactly the new loan payment on both sides.

Results update as you type. Nothing leaves your device.

Monthly payment on the new loan

$504.73

$22,950.00 financed over 60 months at 11.5%, replacing 3 accounts.

Interest saved
$5,520.14
Payment change per month
-$70.27
Fee recovered after
7 months
Rate on the debts today
16.39%

Keeping the accounts versus one new loan

Keep the debtsConsolidation loan
Monthly outlay$504.73$504.73
Interest paid in total$12,853.97$7,333.83
Months to clear6 years 10 months5 years 1 month
Total paid$35,353.97$30,283.83
Difference$5,520.14consolidating costs less

Both columns pay $504.73 a month, so only the rates and the term differ. The keep column pays every minimum first and then avalanches the highest rate.

What the new loan replaces

DebtBalanceAPRMinimum
Credit card$8,00024%$200.00
Store card$2,50027.5%$75.00
Personal loan$12,0009%$300.00
Total$22,50016.39%$575.00

The new loan finances $22,500 plus $450.00 of fees, and lowers the balance-weighted rate by 4.89%.

Consolidating saves $5,520.14 of interest and 1 year 9 months of payments after the $450.00 fee. Keep paying the same monthly amount after the old accounts are gone and the new loan clears early.

This calculator runs both plans with the same monthly budget. Keeping the accounts means paying every minimum and throwing the rest at the highest rate; consolidating means one loan at the quoted rate and fee. Whichever column shows less interest is the cheaper plan for that budget.

How this debt consolidation calculator works

What consolidation actually changes

Three things move and two do not. The number of payments, the interest rate and the term change; the balance and your income do not. A $20,000 balance at a 15% weighted average rate on minimum payments can run for years; the same balance on a five-year loan at 11.5% has a fixed end date.

The new rate is priced on your credit profile and on whether the loan is secured. Personal loans are usually unsecured and priced higher; a home equity loan is cheaper but puts the house behind the debt.

Why the monthly budget has to match

A comparison is only honest if both plans pay the same amount each month. Paying $450 on a new loan while the old accounts would have received $800 is not a saving, it is a smaller payment over a longer time.

Both columns here pay the same budget. The keep column applies every minimum first, then sends the remainder to the highest-rate balance, which is the cheapest way to run several debts. The loan column is paid at the same monthly outlay, so it finishes early when the budget is above the scheduled payment.

What the calculation leaves out

Fees vary: origination fees are usually 1% to 8% of the balance, and balance-transfer promotions charge 3% to 5% with a 0% window that expires. Closing the consolidated accounts also changes your credit utilisation, which can move a score in either direction.

Not modelled: late fees, penalty rates, variable-rate resets, tax treatment of forgiven debt under a hardship programme, and the discipline question of not running the cards back up. If the accounts stay open, that risk is real and worth deciding about before you sign.

Worked examples

Each example below was run through the calculator on this page when the site was built, so the numbers match what you see when you enter the same inputs.

Three accounts, 11.5% for five years

Debts to consolidate
3 items
Consolidation loan APR
11.5%
New loan term
5 years
Origination fee
2%
Monthly amount you can pay
$0.00

Monthly payment on the new loan

$504.73

$22,950.00 financed over 60 months at 11.5%, replacing 3 accounts.

Interest saved
$5,520.14
Payment change per month
-$70.27
Fee recovered after
7 months
Rate on the debts today
16.39%

The new loan is paid at its own payment, so the monthly outlay falls while the balances still disappear on a fixed date.

Low rate but a seven-year term

Debts to consolidate
3 items
Consolidation loan APR
7.9%
New loan term
7 years
Origination fee
2%
Monthly amount you can pay
$0.00

Monthly payment on the new loan

$356.56

$22,950.00 financed over 84 months at 7.9%, replacing 3 accounts.

Interest saved
$5,852.78
Payment change per month
-$218.44
Fee recovered after
3 months
Rate on the debts today
16.39%

A much lower rate can still cost more in total when the term is stretched this far — check the interest row, not the payment.

Same accounts with $800 a month committed

Debts to consolidate
3 items
Consolidation loan APR
11.5%
New loan term
5 years
Origination fee
2%
Monthly amount you can pay
$800.00

Monthly payment on the new loan

$504.73

$22,950.00 financed over 60 months at 11.5%, replacing 3 accounts.

Interest saved
$1,811.02
Payment change per month
-$70.27
Fee recovered after
7 months
Rate on the debts today
16.39%

With a fixed budget on both sides, the loan clears early enough that the interest saving survives the fee comfortably.

Frequently asked questions

Is debt consolidation a good idea?

It helps when the new rate is genuinely lower than the weighted average you are paying and the term is not so long that extra interest cancels the saving. It hurts when the balance stays the same and only the pressure eases, because a cleared card with an open limit invites the same balance back.

Does consolidating debt hurt my credit score?

A hard inquiry costs a few points and a new account lowers the average age of your credit. Against that, replacing high-utilisation card balances with an instalment loan usually reduces utilisation, which helps. Most of the movement is temporary.

Should I close the credit cards after consolidating?

Keeping them open with a zero balance helps utilisation, so closing them can cost points. The real risk is reuse. A common compromise is to keep the accounts open but remove the cards from wallets and online stores, and to track the loan balance weekly.

What is a good APR for a debt consolidation loan?

It depends on your credit and the collateral. Compare the offer against the balance-weighted rate on the debts you are replacing: if the new APR is not clearly lower, or the term is much longer, the maths usually does not work.

Consolidation loan or 0% balance transfer — which is cheaper?

A 0% transfer is cheaper while the promotion runs, provided the 3% to 5% transfer fee is smaller than the interest avoided and you clear the balance before the standard rate returns. For balances too large to clear inside the window, a fixed-rate instalment loan has a predictable end date.

What happens if I cannot pay the consolidation loan?

The lender can send the account to collections, and a secured loan puts the collateral at risk. Talk to the lender before missing a payment: hardship programmes, rate reductions and term extensions exist, but they are far easier to arrange early.

Is debt consolidation the same as debt settlement?

No. Consolidation repays what you owe on better terms. Settlement negotiates to pay less than the balance, damages your credit record, may trigger tax on the forgiven amount, and should be approached with legal advice rather than a calculator.

Assumptions and sources

  • Both plans are simulated month by month with the same monthly budget; the keep column pays every minimum first and then the highest APR balance.
  • Fees are charged as a percentage of the consolidated balance and rolled into the new loan, which is why they raise the true cost of credit.
  • Typical fee ranges (1% to 8% origination, 3% to 5% balance transfer) reflect common US offers and are entered as inputs rather than assumed.

Last reviewed 2026-09-14. This page is an estimate tool, not financial, tax or legal advice.Read the full disclaimer.

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