Debt Consolidation Calculator

Debt consolidation sounds like a no-brainer: combine all your debts into one loan with one payment and a lower interest rate. But here’s the thing — consolidation doesn’t always save you money. Sometimes a lower rate with a longer term means you actually pay more in total interest. This calculator shows you both sides so you can make the right call.

Enter your current debts on one side and a potential consolidation loan on the other, and you’ll see a clear comparison: total interest paid, monthly payment, and payoff timeline for both options.

How to Use This Calculator

Here’s how to get your personalized comparison:

1. Enter your current debts — Add each debt you’re thinking about consolidating. Include the name, current balance, interest rate (APR), and minimum monthly payment. You might consolidate credit cards, personal loans, medical bills, or any combination.
2. Enter the consolidation loan details — Put in the interest rate, loan term (in months), and any origination fees. If you’ve gotten a preapproval or a quote from a lender, use those real numbers. If you’re just exploring, try a few different scenarios.
3. Click Compare — The calculator will show you a side-by-side breakdown of your current path versus the consolidation option.

You’ll see four key numbers: your current monthly payment versus the new one, your current total interest versus the consolidation total interest, the payoff timeline for each option, and the bottom-line difference — how much you’d save or lose by consolidating.

Try different loan terms. This is the most important experiment you can run. A 36-month consolidation loan will look very different from a 60-month one, even at the same interest rate.

How Debt Consolidation Works

Debt consolidation is straightforward in concept: you take out one new loan, use it to pay off all your existing debts, and then you make a single monthly payment on the new loan. Instead of juggling five credit cards with five due dates and five interest rates, you have one payment to focus on.

The potential benefits are real:

• A lower interest rate — If you qualify for a consolidation loan at 10% and your credit cards are charging 20-25%, that rate difference can save you serious money.
• One simple payment — Fewer bills to track means fewer chances to miss a payment.
• A fixed payoff date — Most consolidation loans have a set term, so you know exactly when you’ll be debt-free.

When Consolidation Saves You Money

Consolidation works best when all three of these are true:

1. The new interest rate is significantly lower than what you’re currently paying. A drop from 22% to 10% is meaningful. A drop from 15% to 13% probably isn’t worth the hassle.
2. The loan term is the same or shorter than the time it would take to pay off your current debts. This is the key factor most people overlook.
3. You stop adding new debt. If you consolidate your credit cards and then run them back up, you’ll end up worse off than where you started.

Here’s a concrete example where consolidation wins: Say you have three credit cards with a combined balance of $12,000, averaging 22% APR, with minimum payments totaling $360 per month. At that pace, it would take you about 44 months to pay them off, and you’d pay roughly $3,800 in interest.

Now say you qualify for a consolidation loan at 9% for 36 months. Your monthly payment would be about $382 — just $22 more than your current minimums — but you’d pay only $1,740 in total interest. That’s a savings of over $2,000, and you’d be debt-free 8 months sooner.

When Consolidation Costs You More

Here’s the trap that catches many people: a lower rate doesn’t always mean less total interest. It depends on how long the loan lasts.

Using the same $12,000 example above, imagine you take a consolidation loan at 11% — still much lower than 22% — but with a 60-month term instead of 36. Your monthly payment drops to a comfortable $261, which feels great. But over five years at 11%, you’d pay about $3,670 in total interest. That’s nearly as much as you would have paid on the credit cards — and it takes you 16 months longer to be debt-free.

This is exactly what the calculator is designed to catch. A lower monthly payment can be deceiving if you’re stretching the timeline. Always compare the total interest paid, not just the monthly payment.

Watch Out for Fees

Many consolidation loans come with origination fees, typically 1% to 8% of the loan amount. On a $12,000 loan, a 5% origination fee adds $600 to your cost. This calculator factors in those fees so you see the true comparison. A loan that looks like it saves $800 in interest might only save $200 after fees — or might not save anything at all.

FAQ

Is a balance transfer card better than a consolidation loan?

It depends on how much you owe and how fast you can pay it off. Balance transfer cards often offer 0% APR for 12 to 21 months, which beats any loan rate. But they come with transfer fees (usually 3-5%), and if you don’t pay off the full balance before the promotional period ends, the rate jumps — often to 20% or higher. If you can realistically pay off your debt within the promotional window, a balance transfer is usually the better deal. If you need more time, a fixed-rate consolidation loan gives you more predictability.

Will consolidating hurt my credit score?

There’s usually a small, temporary dip when you apply for a new loan (from the hard inquiry and the new account). But consolidation can actually help your credit score over time in two ways: it lowers your credit card utilization (since the card balances go to zero), and it adds an installment loan to your credit mix. Most people see their score recover — and often improve — within a few months. Just don’t close your old credit card accounts right away, since that can reduce your total available credit and temporarily lower your score.

What if I can’t qualify for a lower interest rate?

If your credit score isn’t strong enough to get a rate that’s meaningfully lower than what you’re paying now, consolidation probably isn’t the right move yet. Focus on making consistent payments to build your score — even six months of on-time payments can make a difference. You can also look into nonprofit credit counseling agencies, which can sometimes negotiate lower rates with your existing creditors through a debt management plan.

Should I consolidate all my debts or just some of them?

You don’t have to consolidate everything. In fact, it sometimes makes more sense to consolidate only your high-interest debts (like credit cards) and leave low-interest debts (like a 4% student loan) alone. Use this calculator to test different combinations. Try entering just your credit cards first, then add other debts and see how the numbers change.

What’s the biggest mistake people make with consolidation?

Running up the credit cards again after paying them off with the consolidation loan. This is by far the most common pitfall. You end up with the consolidation loan payment plus new credit card balances, and you’re in a deeper hole than before. If you consolidate, consider putting your credit cards somewhere you won’t use them for everyday spending. Switch to cash or a debit card until the consolidation loan is paid off. The goal is to get out of debt, not to free up credit limits.