Debt consolidation calculator

How this calculator works

This calculator compares paying off your current debt balances on their existing terms against replacing them with a single fixed-rate consolidation loan. It simulates the current path month by month using a weighted average APR and your entered monthly payment, then compares total interest, payoff time, and total cost on a consolidation loan including its rate, term, payment, and origination fee.

The weighted APR approximates the blended interest rate across all balances based on each balance's share of total debt. The consolidation scenario assumes you borrow enough to pay off the listed balances, pay the origination fee as modeled, and make fixed payments on the new loan until it is retired.

Consolidation reorganizes debt—it does not erase it. Savings appear only when the new loan's cost and your payment behavior produce a lower total interest or shorter payoff than staying the course. This calculator cannot model balance-transfer promotional rates, variable APR changes, or new charges on paid-off cards.

What affects the result

Whether consolidation saves money depends on rate, term, fees, and what happens after you consolidate.

• Weighted APR on current debt — Higher-rate credit card balances pull the weighted average up. Consolidation helps most when the new loan APR is materially lower than the blended rate you actually pay today.
• Consolidation loan rate and term — A lower APR on a much longer term can reduce the monthly payment while increasing total interest. Total cost matters more than payment comfort.
• Origination fee — Personal loan consolidation often charges 1%–8% upfront. That fee is real borrowing cost and can offset savings from a lower rate.
• Current payment amount — The comparison assumes you continue paying the entered amount on current debt. If you pay only minimums today, enter that honestly; if you pay extra, consolidation savings may look different.
• Post-consolidation behavior — Running up balances on freed-up credit cards eliminates savings and can increase total debt. The calculator assumes no new borrowing.
• Collateral — Secured consolidation (home equity, 401(k) loan) may offer lower rates but adds asset risk this model does not quantify.

A lower payment feels like relief but can cost more over time if it comes from stretching repayment across additional years.

Real-world examples

1. Credit cards to personal loan. You owe $20,000 across cards at a 20% weighted APR and pay $600 per month. A 3-year consolidation loan at 10% with a 2% origination fee may save thousands in interest and shorten payoff versus continuing at 20%—if you stop using the cards for new balances.

2. Lower payment, higher total cost. The same $20,000 at 20% with $600 monthly payments might pay off in roughly 4 years. A consolidation loan at 12% over 7 years with a $350 payment could ease cash flow but cost more in total interest despite the lower rate than staying aggressive on cards.

3. Small balance not worth consolidating. $4,000 at 18% with a $200 monthly payment may pay off in roughly 2 years with modest total interest. A consolidation loan with a 5% origination fee and 36-month term could cost more overall for such a small balance.

4. Balance transfer alternative. A 0% promotional APR for 18 months with a 3% transfer fee may beat a personal loan for disciplined payers who can retire the balance before the promo ends. Compare using the balance transfer calculator alongside this tool.

Common mistakes

• Comparing payment instead of total cost. A consolidation loan's lower monthly number often reflects a longer term, not true savings.
• Omitting origination fees. A $15,000 loan with a 4% fee costs $600 upfront before interest accrues.
• Reusing paid-off credit cards and increasing total debt. Consolidation frees credit lines. New charges on top of the loan payment create a worse outcome than before.
• Pledging collateral without considering added risk. Home equity consolidation puts your home on the line for unsecured card debt.
• Using a weighted APR when payoff order matters. Avalanche and snowball methods apply payments differently than a single blended rate. Use the debt payoff calculator for strategy comparisons.
• Consolidating without fixing the spending pattern that created the debt. Lower interest helps only if total borrowing stops growing.

When to use this calculator

Use this calculator after receiving a real consolidation loan quote—not from a generic rate advertisement—and when your goal is to compare total interest and payoff time against your current path.

It fits credit card or mixed unsecured debt where a fixed personal loan is an option. Pair it with the debt payoff calculator for avalanche vs. snowball strategies, the balance transfer calculator for promotional APR offers, and the loan comparison calculator to compare two consolidation quotes side by side.

Apply only after you have a plan to avoid new balances on consolidated accounts.

Related calculators

Compare snowball, avalanche, and custom payoff strategies with the debt payoff calculator. Model a 0% balance transfer promo using the balance transfer calculator. Compare two loan quotes with the loan comparison calculator. Estimate a single personal loan with the personal loan calculator.