How to use this calculator
- Add one row for each debt you want to combine: credit cards, store cards, personal loans, medical bills. Enter the balance, the APR and what you pay each month now.
- Enter the consolidation loan offer: its interest rate, the term in months, and the origination fee. Use the interest rate rather than the APR, because a loan’s APR already includes the fee and it would be counted twice.
- Read the result. You’ll see your new monthly payment, your debt-free date, and the total cost of each option, interest and fees included.
Nothing you enter is sent anywhere: the math runs in your browser. If you’d rather keep your debts and pay them off in a smart order, try the debt snowball vs avalanche calculator.
What debt consolidation means
Debt consolidation means taking out one new loan, usually a fixed-rate personal loan, and using it to pay off several existing debts. Instead of many payments with different rates and due dates, you have one payment at one rate for a set number of months.
It can help in two ways: a lower interest rate means less of each payment goes to interest, and a fixed term gives you a firm debt-free date. But a lower monthly payment doesn’t automatically mean you save money. That depends on the rate, the fee and how long you take to repay.
The formula behind the numbers
For your current debts, the calculator pays each one at its current monthly payment until it’s gone, adding interest each month (APR ÷ 12). For the loan, it uses the standard amortization formula:
Loan amount = Total debt ÷ (1 − Origination fee %)
Monthly payment = Loan × r ÷ (1 − (1 + r)−n), where r = interest rate ÷ 12 and n = term in months
Total cost = All interest + Origination fee
Most personal loan lenders take the origination fee out of the loan before paying it to you. So to receive enough to clear all your debts, you need to borrow a little more than you owe. The calculator does this for you.
Worked example
These are the numbers the calculator loads with: three debts totaling $15,500, with $495 a month in payments and an average APR of 22.29%.
| Debt | Balance | APR | Monthly payment |
|---|---|---|---|
| Credit card | $7,800 | 24.99% | $235 |
| Store card | $3,200 | 27.49% | $105 |
| Personal loan | $4,500 | 13.9% | $155 |
The loan offer is an 11.99% interest rate for 48 months with a 5% origination fee. To end up with $15,500, you borrow $16,315.79; the fee is $815.79.
| Consolidation loan | Keep current debts | |
|---|---|---|
| Monthly payment | $429.58 | $495.00 |
| Debt-free in | 48 months | 58 months |
| Interest | $4,304 | $8,968 |
| Fees | $816 | $0 |
| Total cost | $5,120 | $8,968 |
Here consolidating wins on every count: the payment drops by $65 a month, you’re debt-free 10 months sooner, and you save $3,849. If you keep paying $495 a month on the new loan, it’s gone in 41 months and the total cost falls to $4,390.
When consolidation costs more
A long loan term can make the monthly payment look great while the total cost goes up. Take the same three debts with a different offer: a 17.99% rate over 84 months with a 5% fee. The payment falls to $342.83, about $152 less than today. But you’d pay $13,297 in interest and fees, $4,329 more than keeping your current debts.
Consolidation also backfires if the paid-off cards fill up again. You’d then have the new loan and fresh card balances at the same time. If you consolidate, have a plan for the old cards, such as keeping them open for your credit history but not using them.
Ways to get a better consolidation deal
- Compare offers by APR. The APR includes the origination fee, so it’s the fairer way to compare lenders. Then enter the interest rate and fee in the calculator to see the full cost.
- Prequalify with several lenders. Many lenders show estimated rates with a soft credit check, which doesn’t affect your score.
- Choose the shortest term you can afford. A shorter term usually means a lower total cost, even with a higher monthly payment.
- Check for prepayment penalties. Make sure you can pay the loan off early without extra charges.
- Consider a balance transfer for card debt. If most of your debt is on credit cards and you can repay it within a 0% intro period, a balance transfer may cost less.
Frequently asked questions
Is debt consolidation a good idea?
It’s a good idea when the new loan’s rate is clearly lower than your current average rate, the fee is reasonable, and you won’t run the old balances back up. Check the total cost above, not just the monthly payment.
Does consolidating debt lower my monthly payment?
Often, yes, but mainly because the repayment is spread over a fixed term. A longer term lowers the payment and raises the total interest. The calculator shows both so you can see the trade-off.
What is an origination fee?
It’s a one-time charge some lenders take for setting up a loan, usually a percentage of the amount borrowed. It’s normally deducted from the money you receive, so you borrow a bit more to cover it. Some lenders charge no origination fee; enter 0 in that case.
What is my average interest rate now?
The calculator shows it under the summary. It’s weighted by balance, so a large debt counts more than a small one. If the loan’s APR isn’t well below that number, consolidating is unlikely to save much.
Will debt consolidation hurt my credit score?
Applying for a new loan usually means a hard credit check, which can lower your score slightly for a short time. Over time, on-time payments and lower card balances can help it. Results vary, so check with the credit bureaus or your lender for your situation.
Is my information saved or shared?
No. The calculator runs entirely in your browser. If you use “Copy link to results”, your numbers are stored only in that link, so share it only with people you trust.
This calculator is for education and planning. It assumes fixed rates, no new borrowing, and on-time payments, and it isn’t financial advice. A lender’s figures may differ slightly because of how they calculate interest and fees.