How the debt consolidation calculator works
Enter each debt with what you pay on it each month, then the loan you’re considering. The calculator pays your debts as you do now until each one’s gone, and compares that with one loan big enough to pay them all off, including its origination fee. The difference in total cost, interest plus fees, shows whether consolidating saves you money.
When consolidation helps
It helps most when the new rate is well below your current rates, as with credit cards near 25%. A lower monthly payment isn’t always a saving, though: a longer term can lower the payment while costing more in total. Compare the total cost, not just the payment.
Making it stick
Consolidating only works if the old cards don’t fill back up. A budget that sets aside the loan payment first, and gives the rest of your money a plan, keeps new balances from building while you pay the loan off.
Questions
What should I enter as “Paying”?
What you pay on each debt every month now. If you only pay minimums, use those; for a card, today’s minimum is a little conservative because it shrinks as the balance does.
What about a balance transfer card?
A 0% intro offer is a different calculation, with a transfer fee and a rate that jumps after the intro period. For a rough idea, enter the fee as the origination fee and 0% as the rate, with a term no longer than the intro period.
Does consolidating hurt my credit?
Applying for a loan usually means a hard credit check, which can lower your score a little for a while. Paying cards down can help it. This calculator doesn’t model credit scores.
Estimates only, using monthly compounding at your APR divided by 12. Your lender’s numbers may differ with daily interest, fees or rate changes. This calculator isn’t financial advice.