Debt Consolidation Calculator
Compare keeping your current debts vs consolidating into a single lower-rate loan.
Current Debts
Consolidation Loan
Interest Saved by Consolidating
$10,531
Debt-free 39 months sooner
Keep Separate Debts
Consolidation Loan
Individual Debt Breakdown
| Debt | Balance | APR | Interest | Months |
|---|---|---|---|---|
| Credit Card 1 | $8,000 | 24.99% | $9,367 | 87 |
| Credit Card 2 | $5,000 | 21.99% | $4,090 | 73 |
| Personal Loan | $7,000 | 15% | $1,670 | 35 |
Strategy Tips
- Consolidating saves $10,531 in interest over the life of the loan.
- Your consolidated payment is lower, freeing cash flow. Consider putting the difference toward extra payments.
- High-APR debts (20%+) benefit most from consolidation — prioritize those for maximum savings.
Estimates based on minimum payments. Actual savings depend on your credit score, lender terms, and payment behavior.
How Debt Consolidation Works
Debt consolidation combines multiple debts — credit cards, personal loans, medical bills — into a single loan with one monthly payment. The goal is a lower interest rate, which reduces total interest paid and simplifies your finances. Common options include personal loans (7–15% APR), balance transfer cards (0% intro APR), and home equity loans (6–9% APR). The right choice depends on your credit score, debt amount, and how quickly you can pay it off.
Consolidation Savings by Debt Amount
Assuming current weighted APR of 22%, consolidation at 9.5%, 48-month term:
| Total Debt | Current Interest | Consolidated Interest | Savings |
|---|---|---|---|
| $10,000 | $4,800 | $2,050 | $2,750 |
| $20,000 | $9,600 | $4,100 | $5,500 |
| $30,000 | $14,400 | $6,150 | $8,250 |
| $50,000 | $24,000 | $10,250 | $13,750 |
Consolidation Options Compared
| Option | Typical Rate | Best For | Risk |
|---|---|---|---|
| Personal Loan | 7–15% | Good credit, $5K–$50K debt | Origination fee 1–5% |
| Balance Transfer Card | 0% for 12–21 months | Under $15K, can pay off in promo period | High rate after promo (22–29%) |
| Home Equity Loan | 6–9% | Homeowners with equity | Your home is collateral |
| 401(k) Loan | Prime + 1% | Last resort | Taxes + penalty if you leave job |
| Debt Management Plan | Negotiated (often 8–12%) | Can't qualify for loans | Closes credit accounts |
Frequently Asked Questions
Does debt consolidation hurt your credit score?
Applying creates a hard inquiry (5–10 point dip), but consolidation often improves your score within 2–3 months. Paying off credit cards lowers your utilization ratio — the biggest factor after payment history. Just don't close the old cards (keep them open with zero balance) and don't rack up new charges on them.
When is debt consolidation a bad idea?
Avoid consolidation if: (1) you can't get a lower rate than your weighted average, (2) fees eat up the savings, (3) you'd extend the payoff timeline so much that total interest increases, or (4) you'll continue spending on credit cards after consolidating. Consolidation treats the symptom — the root cause is spending behavior.
See also: Debt Payoff Calculator and Credit Card Payoff Calculator.