How to use the debt consolidation calculator
- For each debt, enter the balance, the interest rate and the monthly payment you make now. Leave a row blank to skip it.
- Enter the consolidation loan rate and the loan term in months.
- Enter the origination fee, if the loan has one.
- Read whether consolidating saves or costs money, and compare the monthly payment, total interest and payoff time in the table.
How the comparison works
Each current debt is run month by month: interest is added at its rate ÷ 12, your payment is taken off, and the count stops when the balance reaches zero. The consolidation loan is a standard amortized loan:
Most consolidation loans take the fee out of the money you receive, so the calculator sizes the loan to leave enough to clear every balance. A debt whose payment doesn't cover its monthly interest would never be paid off, so the calculator flags it instead of giving a total.
Worked example
The defaults are three debts totaling $20,000 and a consolidation loan at 11% for 48 months with a 5% fee:
| Debt | Balance | Rate | Payment | Paid off in | Interest |
|---|---|---|---|---|---|
| 1 | $9,000 | 24.99% | $300 | 4 years | $5,267.28 |
| 2 | $4,500 | 21.99% | $150 | 3 years 8 months | $2,091.41 |
| 3 | $6,500 | 14% | $220 | 3 years 1 month | $1,516.83 |
Paying them as you are now costs $670 a month and $8,875.51 of interest, and you are debt-free in 4 years.
- Loan amount: $20,000 ÷ 0.95 = $21,052.63, so the fee is $1,052.63
- Monthly rate: 0.11 ÷ 12 = 0.0091667, and the payment on $21,052.63 over 48 months is $544.12
- Interest on the new loan: the 48 payments total $26,117.58 (using the unrounded payment of $544.1163), less the $21,052.63 borrowed, which leaves $5,064.95
- Interest plus fee: $5,064.95 + $1,052.63 = $6,117.58
- Saving: $8,875.51 − $6,117.58 = $2,757.93, and the payment drops by $125.88 a month
At 20% instead of 11%, the same loan would cost $1,875.17 more than keeping your current payments.
When consolidation helps and when it doesn't
Consolidation saves money when the new rate is well below the average rate on your debts and you don't stretch the term much. In the example, a 60-month term lowers the payment to $457.74, but the saving shrinks to $1,411.40 because you pay interest for an extra year. The fee matters too: 5% of a $21,000 loan is over $1,000 you pay on day one.
The biggest risk is behavioral. Paying off credit cards with a loan frees up their limits, and running the balances up again leaves you with the loan and new card debt. If you mainly want a plan rather than a new loan, the debt payoff calculator shows the avalanche and snowball methods, and the credit card payoff calculator handles a single card.
Frequently asked questions
Does a lower monthly payment mean I save money?
Not necessarily. A longer term can lower the payment while raising the total interest. Look at the total cost line, interest plus fees, not just the payment. This calculator shows both so you can see the trade-off.
What if one of my payments doesn't cover the interest?
Then that balance grows or never shrinks, and it would never be paid off at that payment. The calculator flags the debt and shows the consolidation payment, which at least has a fixed end date. That case is a strong sign the debt needs a bigger payment or a lower rate.
Is a balance transfer card better than a consolidation loan?
It can be, if you can clear the balance within the 0% promotional period. Transfer fees are often 3% to 5% of the amount moved, and the rate jumps when the promotion ends. A fixed-rate loan has a set payoff date and a payment that never changes.
Does consolidating hurt my credit score?
Applying usually causes a hard inquiry, which may lower your score slightly for a while. Paying off revolving card balances can improve your credit utilization, which often helps. Missing payments on the new loan would hurt, as with any debt.
Related calculators
- Debt Payoff Calculator — Compare the snowball and avalanche methods across all your debts and see your debt-free date.
- Credit Card Payoff Calculator — How long a card balance takes to clear and the interest you pay, at a fixed payment or a target date.
- Personal Loan Calculator — Monthly payment, total cost and true APR of a personal loan, including an origination fee.
- Repayment Calculator — How long a balance takes to repay at a fixed payment, or the payment that clears it by your deadline.
Results are estimates for educational purposes and are not financial, tax or legal advice. See our disclaimer.