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Debt Consolidation Calculator
See if consolidating multiple debts into one loan saves money. Compare your current total interest vs. a single consolidation loan. We're building this calculator now — check back soon.
See if consolidating multiple debts into one loan saves money. Compare your current total interest vs. a single consolidation loan. We're building this calculator now — check back soon.
Debt consolidation combines multiple debts — credit cards, medical bills, personal loans — into a single new loan with one monthly payment, ideally at a lower interest rate. This calculator shows how much you could save in interest and how much sooner you could be debt-free by consolidating, compared to continuing to pay each debt separately at current minimum or fixed payments.
The calculator runs a month-by-month amortization of each existing debt under your current payment schedule, then runs the same simulation for a single consolidation loan covering the total balance. The difference in total interest paid is your potential gross savings. Net savings deduct origination fees, balance transfer fees, or other consolidation costs.
A 0% APR balance transfer card is often the cheapest consolidation option if you qualify. The 0% period runs 12–21 months, with transfer fees typically 3–5% of the transferred balance. If you pay off the balance within the promotional period, your total cost is just the transfer fee. After the promo period, rates jump to 20–30%.
Unsecured personal loans from banks, credit unions, or online lenders are the most common consolidation tool. Rates range from 6% for excellent credit to 36% for poor credit. Credit unions often offer the lowest rates for members. If your consolidation rate is higher than your weighted average current rate, consolidation saves nothing on interest.
Your weighted average rate is the blended rate across all debts, proportional to their balances. A consolidation loan only saves money if its rate is meaningfully below this weighted average — accounting for fees.
Initially, yes — a new loan creates a hard inquiry and lowers average account age. However, reducing credit utilization on revolving accounts can improve your score medium-term. Paying the consolidated loan on time consistently will rebuild credit over 12–24 months.
Consolidation pays debts in full through a new loan or DMP — credit is not severely damaged. Settlement negotiates with creditors to accept less than owed (typically 40–60 cents on the dollar), severely damages credit, and the forgiven amount is generally taxable as income (Form 1099-C).
The avalanche (highest rate first) and snowball (smallest balance first) methods cost nothing and are often better than consolidation if the rate reduction from consolidating would be minimal. Consolidation makes more sense when the rate reduction is significant (5+ percentage points) or when you genuinely need the simplicity of one payment.
Consolidation is most compelling with $5,000+ in high-interest debt across multiple accounts, when primarily making minimum payments, and when you can qualify for a rate at least 3–5 percentage points below your weighted average. Amounts under $2,000 are often better handled directly with snowball or avalanche.
Use the Debt Payoff Calculator to compare avalanche vs. snowball strategies without consolidating. The Credit Card Calculator shows exactly how long minimum payments take on each card. For home equity consolidation options, see the HELOC Calculator.