A debt consolidation calculator compares what your current debts cost each month with the payment on a single new loan, and shows how much interest consolidation could save. $20,000 at 18% over 48 months costs $587.50 a month; at 9% it costs $497.70, saving about $4,310.36.
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How to use the debt consolidation calculator
- Enter the total of the debts you want to consolidate.
- Enter their current average APR and how many months you expect to take to pay them off.
- Enter the consolidation loan APR, term in months and any origination fee.
- Compare the payments and the total cost of each option.
How the debt consolidation calculator works
Debt consolidation replaces several debts with one new loan, ideally at a lower rate. The debt consolidation calculator compares the total cost of paying your current debts at their average APR over the time you expect, with the total cost of the new loan at its APR and term, including any origination fee. The two terms can differ, so it shows whether a lower payment really saves money.
- Payment = balance × r ÷ [1 − (1 + r)−n], where r = APR ÷ 12 and n = months
- Total cost = payment × months (plus the fee if you pay it upfront)
- Savings = current total cost − consolidated total cost
Debt consolidation calculator worked example
You owe $20,000 across several cards and loans at an average 18% APR. Paying it off over 48 months would take $587.50 a month, with $8,200.00 of interest. A 48-month consolidation loan at 9% costs $497.70 a month and $3,889.64 of interest. You save $89.80 a month and about $4,310.36 in total.
| New APR | Months | Payment on $20,000 | Total interest |
|---|---|---|---|
| 6% | 48 | $469.70 | $2,545.63 |
| 9% | 36 | $635.99 | $2,895.81 |
| 9% | 48 | $497.70 | $3,889.64 |
| 9% | 60 | $415.17 | $4,910.03 |
| 12% | 48 | $526.68 | $5,280.48 |
| 15% | 48 | $556.61 | $6,717.52 |
Notice that a longer term lowers the payment but raises total interest: at 9%, 60 months costs more interest than 36 months. A lower payment is not the same as a cheaper loan.
Include fees before deciding
Many personal loans charge an origination fee, often deducted from the money you receive, so you may need to borrow more to pay off the same debts. A 5% fee on $20,000 is $1,000, which would cancel about a quarter of the savings in the example. Enter the fee in the debt consolidation calculator and choose whether it is added to the loan or paid upfront; the result then includes it in the total cost. Compare offers by APR, which includes most fees, and by the total of all payments. Balance transfer cards usually charge a transfer fee and a promotional rate that ends after a set period, after which a much higher APR applies.
Consolidation options
- Personal loan: fixed rate, fixed payment and end date.
- Balance transfer card: low or 0% promotional rate for a limited time; best for balances you can clear before it ends.
- Home equity loan or line of credit: often a lower rate, but your home secures the debt, so missed payments can lead to foreclosure.
- Debt management plan: a nonprofit credit counseling agency negotiates lower rates and you make one payment to the agency.
When consolidation does not help
Consolidation lowers cost only if the new rate is lower and you stop adding new debt. If paid-off cards are used again, you can end up with the loan plus new balances. Be wary of companies that charge large upfront fees or promise to settle debts for less; the Federal Trade Commission warns that debt relief services may not charge fees before they settle a debt. Use the debt consolidation calculator to check the numbers, and compare the result with simply paying more each month on your current debts.
Estimates for education only, not financial advice. Your lender’s figures are final.
Before you apply
Check your credit reports and score first, because the rate you are offered depends on them. Prequalification with several lenders usually uses a soft credit check that does not affect your score, so you can compare real offers. List each debt with its balance, APR and minimum payment, and confirm the payoff amount with each creditor. After the loan funds, make sure every old account shows a zero balance, and keep making payments until it does. A good result from the debt consolidation calculator is a lower rate, a term no longer than you need, and fees you have counted.
Related converters and calculators
Related calculators:
- Debt payoff calculator: payoff
- Credit card payoff calculator: cards
- Loan calculator: loans
- Debt-to-income calculator: DTI
Sources
CFPB: What is amortization?; FTC: How To Get Out of Debt.
Formula and method
Current payment = PMT(balance, old_rate, old_months). Loan = balance + fee (if financed). New payment = PMT(loan, new_rate, months). Savings = current payment × old_months − (new payment × months + fee if paid upfront).
Total-cost comparison with separate payoff terms and an origination fee (financed or upfront). Assumes fixed rates and no new borrowing.
Questions about this calculator
Does debt consolidation save money?
Only if the new APR, including fees, is lower and you avoid new debt.
How much can I save consolidating $20,000?
About $4,310.36 going from 18% to 9% over 48 months.
Does a longer term save money?
No, it lowers the payment but raises total interest.
Should I include fees?
Yes; enter the origination fee and the calculator includes it in the total cost.
Is using home equity risky?
Yes, your home secures the loan.
Check the assumptions and units before relying on a result. Financial, tax and health estimates do not replace advice for your individual circumstances.
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