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Debt Consolidation Calculator

Add your current debts and compare them against a single consolidation loan. See exactly how much you could save each month and in total interest.

Loan Payment Formula

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Current Debts
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Consolidation Loan Details
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What Is Debt Consolidation?

Debt consolidation rolls multiple debts into a single loan with one monthly payment. The goal is to secure a lower interest rate, reduce your monthly outflow, and simplify your finances so you can pay everything off faster.

This strategy works best when your existing debts carry high interest rates, like credit cards at 18-25% APR, and you can qualify for a consolidation loan at a meaningfully lower rate.

💳

One Payment

Replace juggling multiple due dates with a single monthly payment

📉

Lower Interest

Potentially cut your overall interest rate and save thousands

📅

Clear Timeline

Know your exact payoff date from day one

Pros and Cons of Consolidation

Debt consolidation is not a magic fix. It works well in the right situation but can backfire if the underlying spending habits do not change.

ProsConsWatch Out For
Lower monthly payment May extend your payoff timeline Longer terms can mean more total interest even at a lower rate
Single payment simplifies tracking Requires good credit for best rates Borrowers with poor credit may not qualify for rate improvement
Reduced interest rate Origination fees add upfront cost Some lenders charge 1-6% of the loan amount in fees
Fixed payoff date Temptation to rack up new debt Freed-up credit cards can lead to a worse situation if reused

Types of Debt Consolidation

🏦

Personal Loan

An unsecured fixed-rate loan from a bank, credit union, or online lender. Rates typically range from 6% to 36% depending on your credit score. No collateral required, and terms usually run 2 to 7 years.

💳

Balance Transfer Credit Card

Move high-interest balances to a card offering a 0% intro APR for 12-21 months. Great if you can pay off the balance before the promo period ends. Watch for a 3-5% transfer fee.

🏠

Home Equity Loan or HELOC

Borrow against your home equity at lower rates, often 5-8%. The risk is that your home serves as collateral, meaning missed payments could lead to foreclosure.

🎓

Student Loan Consolidation

Federal Direct Consolidation combines federal student loans into one loan with a weighted average rate. Private refinancing can lower rates but may sacrifice federal protections like income-driven repayment.

When Consolidation Makes Sense

Consolidation works best when a few conditions line up. If most of these apply to your situation, it is probably worth exploring.

You carry multiple debts at interest rates above 10-15%. You can qualify for a consolidation loan at a meaningfully lower rate. You have a steady income to handle the new monthly payment. You are committed to not running up new balances on the accounts you just paid off.

✅

Good Fit

High-rate credit card debt totaling $5,000 or more, strong enough credit to qualify for a rate under 10%, and a plan to avoid new debt.

⚠️

Proceed With Caution

If the consolidation loan term is significantly longer, run the numbers carefully. A lower monthly payment might feel better but could cost more in total interest over the life of the loan.

❌

Probably Not the Right Move

If you cannot qualify for a rate lower than your current weighted average, or if your total debt is small enough to pay off in 6-12 months with focused effort, consolidation may just add fees and complexity.

How to use this debt consolidation calculator

  1. For each existing debt, enter a Debt Name (e.g., Visa, Auto Loan), the current Balance ($), the Interest Rate (%) shown on your statement, and the Monthly Payment ($) you currently send.
  2. Click Add Another Debt to repeat for every credit card, personal loan, or store card you want to roll up. Leaving smaller debts out understates your potential savings.
  3. Enter the Consolidation Loan Rate (%) — use the lender's quoted APR after fees, not the headline rate — and the Consolidation Loan Term (months), typically 36, 48, or 60.
  4. Click Compare Debts. The calculator amortizes each existing balance against your current payment, sums total interest and payoff time, and compares them to the new single loan.
  5. Read the Monthly Savings and Interest Saved cards. A positive Interest Saved figure means consolidation comes out ahead on lifetime cost — not just monthly cash flow.

Examples

Three credit cards into a 5-year personal loan

A borrower carries three cards: $15,000 at 22% APR (paying $400/month), $8,000 at 19% APR ($240/month), and $5,000 at 24% APR ($150/month). A credit union offers a $28,000 personal loan at 9% APR for 60 months.

ResultCurrent monthly total $790, consolidated monthly $581 — about $209/month freed up. Current lifetime interest roughly $17,400 versus $6,860 on the new loan, saving close to $10,500 in interest.

The calculator amortizes each card at its own rate and minimum payment, then plugs $28,000 into M = P·r(1+r)^n / ((1+r)^n − 1) with r = 0.09/12 and n = 60 to get the new $581 payment. The big saving comes from cutting the weighted average rate from about 21.5% to 9% and locking in a fixed 5-year payoff instead of the 6-8 years the cards would take at the current minimums.

HELOC consolidation: lower rate, longer rope

A homeowner with $40,000 of mixed credit card and auto debt at a weighted 17% rate is offered a 15-year HELOC at 7.5% to pay it all off. The current combined monthly payments total about $1,050.

ResultConsolidated monthly drops to roughly $371 — about $679/month freed up — but total interest over 15 years runs about $26,700, compared to about $18,200 on the original 6-7 year payoff trajectory.

Stretching $40,000 over 180 months at 7.5% cuts the monthly payment by nearly two thirds, which is why it feels attractive. But lifetime interest actually rises because the loan runs roughly nine extra years. The HELOC also makes the debt secured by your home — a missed payment that was previously a credit card late fee now risks foreclosure. The calculator surfaces this tradeoff by showing a positive Monthly Savings but a negative Interest Saved figure.

Balance transfer card with a 0% intro APR

A borrower with $9,000 in credit card debt at 21% APR (currently paying $250/month) transfers the full balance to a new card offering 0% APR for 18 months, with a 3% transfer fee ($270). They plan to repay $521/month to clear the balance before the promo ends.

ResultConsolidated monthly $515 (the calculator returns $9,000 ÷ 18 since rate is 0%). Current lifetime interest roughly $3,500 over a ~5-year payoff at $250/month, versus $270 in transfer fees — about $3,200 saved if the balance is fully cleared in the 18-month window.

At 0% APR the loan-payment formula simplifies to P ÷ n, so $9,000 ÷ 18 = $500, plus you need to amortize the $270 fee. The strategy only wins if you actually pay it off in 18 months; any balance left when the promo expires usually jumps to a regular card rate of 18-25%, which can wipe out the savings. Enter your realistic payment, not the minimum, to see whether the math actually works.

How it works

Each existing debt is amortized independently at its own interest rate and monthly payment. The calculator simulates month-by-month: interest accrues on the current balance at r = annualRate/12, that interest is added to the balance, and your payment is subtracted. The loop runs until the balance hits zero, giving the total interest paid and the payoff month for that specific debt.

The consolidation loan is treated as a fresh fixed-rate installment loan covering the sum of all balances. Its monthly payment comes from the standard amortization formula M=P⋅r(1+r)n(1+r)n−1M = P \cdot \frac{r(1+r)^n}{(1+r)^n - 1}, where PP is the combined balance, rr is the new monthly rate, and nn is the term in months. Total consolidated interest is simply M⋅n−PM \cdot n - P.

Monthly Savings compares the sum of all existing minimum payments against the new single payment. Interest Saved compares the sum of lifetime interest on the current debts against lifetime interest on the consolidation loan. The two figures can disagree: a longer term often shows positive Monthly Savings but negative Interest Saved, which is the classic consolidation trap.

The payoff time for the current debts is reported as the longest individual payoff among them, since you only become debt-free when the last card is cleared. The consolidated payoff equals the term you entered. The calculator also flags any debt where your monthly payment is less than the monthly interest charge — in that case the balance grows forever and Interest is shown as Never.

When to use this calculator

  • Sizing a personal loan offer. Plug in the personal loan APR and term a lender prequalified you for. The calculator tells you whether the new payment and lifetime interest actually beat your current cards before you formally apply and trigger a hard credit pull.
  • Comparing strategies side by side. Run the same set of debts against a 36-month personal loan, then a 60-month version, then a HELOC. The Monthly Savings vs. Interest Saved tradeoff becomes obvious and helps you pick a term, not just a product.
  • Evaluating a balance transfer offer. Enter your card balances and use a 0% rate with the promo length (12-21 months) as the term. You'll see whether your realistic monthly payment can actually clear the balance before the promo expires.
  • Stress-testing a HELOC consolidation. HELOCs are cheap monthly but long. Use the calculator to confirm that the lifetime interest still beats your current debts, and remember the result understates the real risk because your home is now collateral.
  • Talking to a credit counselor. Bring the printed comparison to a nonprofit counselor (NFCC member agency). It speeds the conversation past 'how much do you owe?' and into 'which structure makes sense for you?'

Common mistakes

  • MistakeComparing only the monthly payment, ignoring total interest.
    FixA lower payment over a longer term often costs more lifetime. Always check the Interest Saved figure. If it is negative, you are paying for cash flow with extra interest.
  • MistakeUsing the lender's headline rate instead of the APR.
    FixOrigination fees of 1-6% are common on personal loans. The APR bakes those fees into the rate. Enter the APR — that's the figure the federal Truth in Lending Act requires lenders to disclose.
  • MistakeLeaving small debts out of the comparison.
    FixA $1,500 store card at 28% APR drags down your weighted average. Include every revolving debt you intend to consolidate; otherwise the calculator under-reports your savings.
  • MistakeForgetting the balance transfer fee on 0% offers.
    FixA 3-5% transfer fee on a $10,000 balance is $300-$500 of upfront cost. Add it mentally to the consolidated interest figure — the offer only beats your current cards when the savings exceed the fee.
  • MistakeClosing the paid-off credit cards.
    FixClosing accounts cuts your total available credit and shortens average account age, both of which can lower your FICO score. Leave the cards open with no balance; just don't reuse them.
  • MistakeRunning up new balances on the freed-up cards.
    FixThis is the single biggest reason consolidation fails. Move the cards out of your wallet, freeze them, or set a tiny recurring charge with autopay so the account stays active without temptation.
  • MistakeChoosing a HELOC without weighing the foreclosure risk.
    FixSecured debt turns a temporary cash flow problem into a housing problem. Only use a HELOC if your income is stable and you have a documented plan to pay it off within the draw period.

Frequently asked questions

Is debt consolidation a good idea?

It's a good idea when three things are true: your existing debts carry meaningfully higher rates than the consolidation loan, you can fit the new payment comfortably in your budget, and you have a credible plan to avoid running up new balances. If any of those is missing, the math may still work on paper but the strategy tends to fail in practice. The CFPB recommends running the numbers both ways — monthly savings and total interest — before signing.

Does debt consolidation hurt my credit score?

Short-term, yes — you'll see a small drop from the hard inquiry when you apply and from opening a new account, which lowers your average account age. Long-term, consolidation usually helps because it cuts your credit utilization ratio on revolving accounts and creates a steady on-time payment history on the new installment loan. Most borrowers see their score recover within 6-12 months if every payment is on time.

What's the difference between consolidation and refinancing?

Consolidation combines multiple debts into one new loan. Refinancing replaces a single existing loan with a new one at different terms, usually a lower rate. You can refinance a mortgage or auto loan without consolidating anything else. Debt consolidation is essentially refinancing multiple debts at once into a single new loan.

Should I use a HELOC to consolidate credit card debt?

Only with caution. HELOC rates (currently 7-9%) are much lower than credit cards, but you're trading unsecured debt for debt secured by your home. If you fall behind, the lender can foreclose. The Federal Reserve's G.19 report shows HELOC balances grow during financial stress, suggesting many borrowers consolidate and then re-borrow on the cards. If you choose this route, close or freeze the cards and have a strict payoff plan.

What are the risks of secured debt consolidation?

Secured consolidation (home equity loan, HELOC, cash-out refinance, auto title loan) puts an asset at risk if you can't pay. A credit card default damages your credit; a HELOC default can take your house. Secured loans also often run 10-30 years, which can increase total interest even at a lower rate. Use the Interest Saved figure to confirm the lifetime math, not just the lower monthly payment.

Will closing my old credit cards after consolidation hurt my score?

Usually yes. Closing accounts reduces your total available credit (raising utilization on any remaining balances) and shortens your average account age — both major factors in FICO scoring. Leave the cards open with a $0 balance. To prevent the issuer from closing them for inactivity, set a small monthly recurring charge on autopay.

How is this different from a debt payoff calculator?

The Debt Payoff Calculator helps you accelerate your existing debts using strategies like snowball or avalanche — you keep the same accounts and just pay them down faster. This consolidation calculator models replacing all those debts with a single new loan at a different rate and term. Run both: payoff first to see what discipline alone can do, then consolidation to see if a new loan beats that.

Are debt relief or debt settlement companies the same as consolidation?

No, and the FTC warns about confusing them. Settlement companies typically tell you to stop paying creditors and save into an escrow account so they can negotiate lump-sum payoffs for less than you owe. That tanks your credit, may trigger lawsuits during the negotiation period, and forgiven debt over $600 is usually reported as taxable income on a 1099-C. Consolidation pays your debts in full at a better rate — a very different financial profile.

What credit score do I need to qualify for a good consolidation rate?

Most lenders advertise their best personal loan rates for scores of 720 and above. Scores 670-719 typically qualify but at rates several points higher. Below 670, you may still get approved but the rate often won't beat your existing credit cards — in which case consolidation just adds fees. Check your score for free at AnnualCreditReport.com before applying.

How long does the whole process take?

Personal loans from online lenders can fund in 1-7 business days after approval. Credit union and bank loans typically take 1-2 weeks. HELOCs require an appraisal and usually run 30-45 days. Balance transfers post within a few days but can take 2-3 weeks for the old account to register the payoff — keep making minimum payments on the original cards until you confirm a zero balance.

Sources

Methodology

Each existing debt is amortized independently by simulating monthly interest accrual at r = annualRate/12 and subtracting the user's monthly payment until the balance reaches zero, producing lifetime interest and payoff months for that debt. The consolidation loan applies the standard amortization formula M = P·r(1+r)^n / ((1+r)^n − 1), where P is the sum of all current balances, r is the new monthly rate, and n is the new term in months; total interest is M·n − P. Monthly Savings compares the sum of current minimum payments to the new single payment; Interest Saved compares aggregated current lifetime interest to consolidated interest. Origination or balance-transfer fees are not auto-added — include them by entering an APR that reflects total cost. If any debt's monthly payment is less than its monthly interest charge, the calculator reports an unbounded payoff so you don't underestimate the trap.

Learn more about our methodology →

Pro Tips

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  • Try different scenarios to compare outcomes
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