About the Debt Consolidation Calculator
This debt consolidation calculator shows whether rolling your credit cards and other debts into a single personal loan actually saves money. Enter your total debt, its average interest rate and what you pay each month now, then the consolidation loan’s rate, term and origination fee.
You get the new monthly payment, the change in your monthly budget, the interest on each path, the fee, the loan’s true APR once the fee is counted, and your net savings. The chart plots both balances over time so you can see which gets you debt-free first. A lower payment is not always a better deal: stretching the term can raise the total cost even at a lower rate, and this calculator makes that visible.
Because most lenders deduct the origination fee from the money you receive, the loan is sized so that the cash you get covers your whole balance (debt ÷ (1 − fee)). Your current debts are modelled as one balance paid with your current total payment, at APR ÷ 12 per month.
With the default inputs, the net savings from consolidating is $4,851.81. Change any value above to recalculate instantly.
How to use the debt consolidation calculator
- 1Add up the balances you want to consolidate and enter the total.
- 2Enter the balance-weighted average APR and your current total monthly payment.
- 3Enter the loan offer’s interest rate, term and origination fee.
- 4Compare the new payment, net savings and payoff time.
- 5Try a shorter term if savings are negative — it usually cuts total interest.
Formula and method
The loan amount L is sized so that, after the lender deducts the origination fee f, you receive enough to pay off your debt D. The new monthly payment M comes from the standard amortization formula at the loan’s monthly rate r over n months.
Your current debts are simulated as one balance at your average APR, paid with your current monthly payment until it reaches zero, to get I_current. Net savings are that interest minus the consolidation loan’s interest and the fee. The true APR is the rate at which M repays only D over n months — it shows the fee’s real cost as a rate.
- D
- Total debt being consolidated
- f
- Origination fee as a decimal
- L
- Consolidation loan amount
- r
- Loan monthly rate = rate ÷ 12 ÷ 100
- n
- Loan term in months
Worked examples
$25,000 at 21% into a 5-year loan at 11.5% with a 5% fee
To net $25,000 after a 5% fee you borrow $26,315.79. At 11.5% for 60 months that costs $578.75 a month — $121 less than now — and $8,409 of interest. Keeping the current debts at $700 a month takes 57 months and $14,577 of interest, so consolidating saves about $4,852 after the $1,316 fee. The fee lifts the true APR to about 13.77%.
$15,000 of cards at 24.99% into a 3-year loan at 9.99%, no fee
The new payment is $483.94, about $34 more than now, but the debt is gone in 36 months instead of 58. Interest drops from $10,867 to $2,422, a saving of roughly $8,445.
When a lower payment costs more: 7-year loan with a 6% fee
The loan lowers the payment by about $203 a month, but stretching $42,553 over 84 months at 14% costs $24,432 of interest plus a $2,553 fee. Paying the existing debts at $1,000 a month costs $21,545 of interest, so this consolidation is about $5,441 more expensive overall.
Frequently asked questions
Does debt consolidation save money?+
It saves money when the new loan’s APR (fee included) is meaningfully lower than your current rate and the term is not much longer than your current payoff time. A long term can make a lower payment cost more in total.
Will a consolidation loan hurt my credit score?+
The application adds a hard inquiry and a new account, which can lower your score slightly at first. Paying off cards usually cuts your credit utilization sharply, which often improves your score within a few months if you avoid new card balances.
What is an origination fee?+
A one-time fee some personal-loan lenders charge, typically 1%–8% of the loan, usually deducted from the money you receive. You must borrow a little more than you owe to cover it, which raises the true APR.
Is debt consolidation or a balance transfer better?+
A 0% balance transfer is usually cheaper if you can repay the balance within the intro period and qualify for a high enough limit. A consolidation loan offers a fixed rate, fixed payment and fixed end date for larger balances.
What credit score do I need for a debt consolidation loan?+
Many lenders accept scores in the 600s, but the best rates generally go to borrowers with good to excellent credit (roughly 690+) and a moderate debt-to-income ratio. Prequalifying with a soft pull shows your likely rate.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.