Debt Consolidation Calculator

1. Add up the balances you want to combine and enter the total, with your average interest rate and total monthly payment.
2. Enter the new loan rate, its term in years and any origination fee.
3. Read the saving, the new payment and the interest cost of each path.

The results line up the two choices side by side:

Debt consolidation means taking out one new loan to pay off several existing debts, such as credit cards, store cards or small personal loans. Instead of juggling several due dates and rates, you make a single fixed payment on the new loan until it is repaid.

It can save money when the new rate is well below the rates you pay now, and it gives a firm end date that minimum card payments never do. But a lower rate alone does not guarantee a saving. Origination fees, a longer repayment term and any new spending on the cleared cards can wipe out the benefit, which is why it pays to run the numbers first.

If your plan is a 0 percent credit card rather than a loan, the balance transfer savings calculator models that promo period more precisely.

It works out two totals, what you would pay by keeping your current debts and what the new loan would cost, and compares them.

For your current debts, B is the balance, i the monthly rate and P your payment, so the months to clear them are n = -ln(1 - Bi/P)/ln(1+i). Paying P for n months is the current total.

1. Find how long your current payment takes to clear the balance and what it costs in total.
2. Gross up the loan to cover the fee: L = B/(1 - f), where f is the fee rate.
3. Calculate the fixed payment on that loan for the chosen term and multiply by the number of months.
4. Subtract the new total from the current total to get the saving.

If your current payment does not even cover the monthly interest, the balance would never shrink, and the calculator flags that instead of a payoff date.

You owe 20,000 across three credit cards at an average of 22 percent and pay 600 a month. At that pace the cards take about 52 months to clear and cost roughly 11,192 in interest.

A lender offers a 4-year consolidation loan at 11 percent with a 5 percent origination fee. To receive 20,000 after the fee you borrow about 21,053. The payment is about 544 a month for 48 months, 26,118 in total, so interest plus fee comes to about 6,118.

Consolidating saves roughly 5,075 and trims the payment by about 56 a month, while finishing four months sooner. Try a 15,000 balance at 18 percent paid at 450, moved to a 3-year loan at 9 percent with no fee: the saving is about 3,778, but the payment rises to about 477 because the term is shorter.

There is more than one way to cut the cost of existing debt, and each suits a different situation.

To see how long your current cards take on their own, the credit card payoff date calculator tracks a single card in detail.

The Rate Gap

The wider the gap between your current average rate and the new loan rate, the bigger the potential saving.

The Loan Term

A longer term lowers the monthly payment but spreads interest over more months. Stretch it too far and you can pay more in total even at a lower rate.

Origination Fees

A fee of 1 to 8 percent is common. Because it is added to what you borrow, it also accrues interest for the life of the loan.

Your Current Payment

If you already pay well above the minimum, your debts may clear quickly anyway, leaving less room for consolidation to help.

Your Credit Score

The rate you are actually offered depends heavily on your credit, so use a real quote rather than an advertised best rate.

Weighing a Loan Offer

Plug in a specific quote to see whether its rate and fee genuinely beat your current path.

Choosing a Term

Compare a 3, 4 and 5 year term to balance a comfortable payment against total cost.

Planning to Become Debt Free

See how a fixed end date compares with the open-ended timeline of minimum card payments.

Checking a Debt Relief Pitch

Test the numbers behind any offer before handing over fees or personal details.

1. Looking Only at the Monthly Payment

A lower payment often comes from a longer term, which can increase what you pay overall. Always compare totals.

2. Ignoring the Origination Fee

A 5 percent fee on a 20,000 loan is about 1,000 up front, plus the interest charged on it.

3. Running the Cards Back Up

Consolidation only helps if the cleared cards stay paid off. New spending leaves you with the loan and fresh card debt.

4. Using Minimum Payments as the Baseline

Enter what you really pay each month. Comparing against minimums can make any loan look like a bargain.

5. Consolidating Low-rate Debt

Rolling a cheap student or car loan into a higher-rate personal loan raises your cost.

The comparison is exact for fixed rates and steady payments, but real debts rarely behave that neatly.

Debt consolidation is taking out one new loan to pay off several existing debts, leaving a single fixed payment. It saves money when the new rate and fees are low enough.

It can, if the new rate is meaningfully lower and the term is not stretched too far. This calculator compares the total paid each way, including the origination fee.

A long term, a high origination fee or a rate that is not much lower can make the new loan more expensive overall, even when the monthly payment drops.

The fee is treated as deducted from the loan, so you borrow a little more to receive your full balance. That extra is repaid with interest.

Use a balance-weighted average. Multiply each balance by its rate, add those up and divide by the total balance.

A new application usually causes a small temporary dip, but paying down card balances can improve your utilisation over time.

A 0 percent transfer can be cheaper if you clear the balance within the promo period. For larger balances needing years, a fixed loan is often more predictable.

Then your current debts would never be paid off at that rate. The calculator flags this, and almost any structured repayment plan would be an improvement.

No. The calculation runs in your browser, and nothing you enter is sent anywhere unless you Save a result, which stays on this device only.

• What do I need to know about consolidating my credit card debt (Consumer Financial Protection Bureau).
• How to get out of debt (Federal Trade Commission).
• Amortization calculation (Wikipedia).