This calculator gives estimates for education and planning. It is not investment, tax or legal advice; for decisions about your own situation, talk to a qualified financial professional.
What consolidation does
Debt consolidation replaces several debts, often credit card balances at high interest rates, with a single new loan. The appeal is obvious: one payment instead of several, and usually a lower rate. But a lower monthly payment does not always mean you pay less overall. This calculator compares what your current debts will cost if you keep paying as you do now with the total cost of a consolidation loan, fees included.
How the comparison works
- Current debts: from the balance, the average rate and your total monthly payment, the calculator works out how many months it will take to pay off and how much interest remains. If your payment does not cover the monthly interest, the debt would never be repaid.
- Consolidation loan: the origination fee is added to the amount borrowed, and the payment is the standard amortizing payment over the chosen term.
- Savings: interest still to pay today minus interest and fees on the new loan.
Worked example
You owe $15,000 on credit cards at an average APR of 22% and pay $450 a month. At that pace you will be debt-free in 52 months and pay about $8,400 in interest. A 48-month personal loan at 12% APR with a 5% origination fee ($750) has a payment of about $415 and costs about $4,900 in interest and fees. You save about $3,500 and finish earlier.
Now stretch the same loan to 84 months: the payment drops below $300, but the total interest climbs, and most of the savings disappear.
Options to consider
| Option | Typical cost | Good to know |
|---|---|---|
| Personal loan | APR about 8 to 36% depending on credit, fee 0 to 8% | fixed term and payment |
| Balance transfer card | 0% for 12 to 21 months, fee 3 to 5% | the rate jumps after the promotion |
| Home equity loan | lower rate | your home secures the debt |
Before you sign
Compare loans by APR and total cost, not monthly payment. Check whether the origination fee is deducted from the amount you receive. Make a plan to avoid running up the cards again, the most common reason consolidation fails. If you are struggling, a nonprofit credit counselor approved by the US Department of Justice or affiliated with the NFCC can review a debt management plan with you at little or no cost.