DeluxeCalc

Debt Consolidation Calculator

Will combining my debts save money?

About this calculator

Debt consolidation replaces several debts, usually credit cards, with one new loan: the loan pays off the old balances, and you make a single fixed payment until it is paid off. It saves money when the loan's rate is well below the rates you pay now and its fees are modest, and it can cost more when the term is long or the fee is high. This calculator compares keeping your current debts, each paid at its minimum until it is gone, with one consolidation loan for the total, and shows how much you save or lose in interest and fees, along with the monthly payment and payoff time for each.

How to use this calculator

List each debt with its balance, APR and current minimum payment; use Add Debt for more and the X button to remove one. Then enter the Consolidation Loan APR you are quoted, the Loan Term in months and the Origination Fee as a percentage. Under Advanced assumptions, choose whether the fee is added to the loan, which is the default, or paid in cash upfront. Results update as you type, and every input, including the list of debts, is saved in the page address so you can share or bookmark the scenario.

The method

For your current debts, each month every balance is charged its APR divided by 12 and then reduced by its minimum payment, until it reaches zero. A paid-off debt's minimum is not moved to the others, so your monthly outlay drops as debts clear; this is the same rule as the minimum-payments-only baseline in our debt payoff calculator. If a minimum payment does not cover its debt's monthly interest, that balance never falls and the current path never finishes. The origination fee is the fee percentage times your total debt. The consolidation loan is a standard fixed-payment loan for your total debt, plus the fee when it is financed, at the loan APR over the term. Its total cost is its interest plus the fee. The saving is the interest on your current debts minus the loan's interest and fee.

Worked example using the default values

Three debts total $12,500: a $6,000 credit card at 24% with a $180 minimum, a $2,500 store card at 29% with a $75 minimum and a $4,000 personal loan at 12% with a $135 minimum. Paid at their minimums, they take 69 months (5 years 9 months) and cost $7,398 in interest, starting at $390 a month. A 48-month consolidation loan at 12% with a 5% fee added to the loan borrows $13,125, including the $625 fee. Its payment is $346 a month, its interest is $3,465, and interest plus the fee comes to $4,090. Consolidating saves $3,308 and finishes 21 months sooner. Paying the $625 fee in cash instead lowers the payment to $329 and raises the saving to $3,473.

Interpreting the results

The headline figure is the difference in total interest and fees. A saving comes from two sources: a lower rate and a fixed term that forces the balance down faster than minimum payments do. Read the monthly payment and the payoff time together. A loan with a lower payment than your current minimums is attractive, but if the lower payment comes from stretching the term, it can cost more overall. In the example, an 18% loan over 60 months lowers the payment to $333, yet costs $100 more than keeping the current debts, and the calculator says so. The chart shows the total balance year by year under each path.

Practical tips

Check your rate offers with prequalification, which usually uses a soft credit check. Compare loans by APR, which includes the fee, and by total cost, not by monthly payment. Choose the shortest term whose payment you can reliably make. Consolidation only works if the paid-off cards stay paid off; keeping the accounts open with a zero balance can help your credit utilization, but new charges on top of the loan leave you worse off than before. If your debt is mostly on credit cards and you can pay it off within a year or two, a 0% balance transfer card may be cheaper, and our balance transfer vs personal loan calculator compares the two.

Limitations

Minimum payments here are fixed dollar amounts, while credit card minimums usually fall as the balance falls, which makes the real current path slower and more expensive than shown; the minimum vs fixed payment calculator models that rule. Rates are fixed, there are no new charges or late fees, and the loan is assumed to pay off every listed debt in full. Interest is charged monthly at the APR divided by 12, while cards often compound daily, so real card interest can be slightly higher. Some lenders deduct the origination fee from the money they send instead of adding it to the loan; in that case borrow enough to cover the full payoff amounts.

Frequently Asked Questions

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