Compare paying off your current debts separately versus consolidating them into a single new loan.
A debt consolidation calculator compares paying off multiple debts separately at their current interest rates and minimum payments versus combining them into a single new consolidation loan at one interest rate and term. It estimates whether consolidating could save you money on total interest and how your monthly payment would change, helping you evaluate whether a consolidation loan, balance transfer, or similar product makes financial sense for your situation.
This calculator first estimates the total interest you'd pay on your current debts if you continue making only minimum payments on each (until each individual debt is paid off). It then calculates a new fixed monthly payment and total interest for a single loan covering your combined balance, at the consolidation rate and term you enter.
Formula: Total Current Debt = sum of all debt balances. Consolidated Monthly Payment = [P × r(1+r)n] / [(1+r)n − 1], where P is the total combined balance, r is the consolidation loan's monthly rate, and n is the term in months. Interest Savings = Total Interest (current debts) − Total Interest (consolidated loan).
Example: Combining a $5,000 balance at 22% and an $8,000 balance at 12% (total $13,000) into a single consolidation loan at 10% over 5 years could lower your combined monthly payment compared to the current minimum payments, while also potentially reducing total interest — since the consolidation rate is lower than your highest current rate. (Note: all figures in this example are for illustration purposes only and do not represent your actual debts or loan offer.)
Debt consolidation can take several forms — a personal loan used to pay off credit cards, a balance transfer to a card with a lower promotional rate, or a home equity loan/HELOC for homeowners. The potential benefit comes from replacing multiple high-interest debts (especially credit cards, often with rates well above 20%) with a single loan at a lower rate and a defined payoff timeline. However, consolidation isn't automatically beneficial — if the new loan's rate isn't meaningfully lower, or if the term is much longer (lowering the payment but increasing total interest), consolidation could cost more overall. It's also important to avoid running up new balances on paid-off credit cards after consolidating (example rates used in this calculator — actual loan offers depend on your credit profile).
Not necessarily. Consolidation tends to help when the new loan's interest rate is meaningfully lower than your current debts' rates. If the new rate isn't much lower, or if a longer term significantly increases total interest despite a lower payment, consolidation may not save money overall.
Common options include personal loans, balance transfer credit cards (often with a promotional low or 0% introductory rate), and for homeowners, home equity loans or HELOCs. Each has different rates, fees, and risk considerations.
No. This calculator compares interest costs only. Origination fees, balance transfer fees, or other costs associated with a consolidation loan would add to its total cost and aren't included here — factor these in separately when evaluating an actual offer.
A common risk is running up new balances on credit cards that were paid off through consolidation, ending up with both the consolidation loan payment and new credit card debt — effectively doubling your debt burden. Consolidation works best alongside a plan to avoid new high-interest debt.
A longer term spreads the same balance over more payments, reducing each individual payment — but interest continues to accrue on the balance for a longer period, which can result in more total interest paid even at a lower rate.
The default is an example only. The rate you'd actually be offered for a consolidation loan depends on your credit score, income, debt-to-income ratio, and the lender — shop around for actual offers to compare against your current debts.
Disclaimer: The information, rates, and figures provided on this page are for educational and illustrative purposes only. All rates, balances, and examples shown are sample values and do not reflect your actual debts or any specific loan offer. Financial rules and lending terms change frequently. Always consult your account statements, potential lenders, and a qualified financial advisor before making any financial decisions.