Debt Consolidation Calculator

Compare your current debts with a consolidation loan. See monthly payment changes, interest savings, and total costs.

First debt (e.g., credit card)

Interest rate for new consolidation loan

Repayment period for consolidation loan

Total Debt = Sum of all debt balances\nWeighted Avg Rate = Σ(Balance * Rate) / Total Balance\nMonthly Payment = P * [r(1+r)ⁿ] / [(1+r)ⁿ - 1]\nTotal Interest = (Payment * Months) - Principal\nSavings = Current Interest - Consolidation Interest
Example:\nDebt 1: $5,000 at 18%\nDebt 2: $3,000 at 22%\nDebt 3: $2,000 at 15%\nConsolidation: 12% for 36 months\n\nTotal Debt: $10,000\nWeighted Rate: 18.3%\nNew Payment: $332/month\nTotal Interest: $1,952\nEst. Current Interest: $3,500+\nSavings: ~$1,550

What is debt consolidation?

Debt consolidation combines multiple debts (credit cards, loans) into a single loan with one monthly payment. Benefits include simplified payments, potentially lower interest rates, and fixed repayment timeline. Common methods: personal loan, balance transfer card, home equity loan.

Will debt consolidation save me money?

It depends on the new interest rate. If your consolidation loan rate is lower than your average current rate, you save on interest. However, extending the term can increase total interest paid despite a lower rate. Always compare total costs, not just monthly payments.

Does debt consolidation hurt my credit score?

Initially, yes - credit inquiries and new account lower score by 5-10 points. Long-term, it can help by lowering credit utilization, establishing on-time payments, and reducing number of accounts with balances. Net effect is usually positive after 6-12 months.

What is a good interest rate for a consolidation loan?

Excellent credit (720+): 6-10%. Good credit (680-719): 10-15%. Fair credit (640-679): 15-20%. Poor credit (below 640): 20-36%. Compare to average credit card APR of 18-24%. If consolidation rate isn't lower, it may not be worth it.

Should I consolidate if I can only afford minimum payments?

Consolidation can help by creating a fixed payment schedule and potentially lowering the payment. However, if you continue accumulating debt, consolidation won't solve the problem. Address spending habits first. Consider credit counseling for deeper financial issues.