Debt Consolidation Calculator

What this calculator does

This debt consolidation calculator compares what you currently pay across several debts against a single replacement loan. Enter each debt with its balance, APR, and minimum payment, or work from totals, plus the rate and term of the new loan, and it returns the new monthly payment, the monthly saving, total interest saved, and the weighted average APR of what you hold now.

The weighted average is where the decision is actually made. Consolidation only saves money if the new rate beats the blended rate of the debts it replaces, and the blend has to weight by balance. UK borrowers are often surprised how much a large arranged overdraft at 39.9 percent lifts that average.

When to use it

The usual trigger is juggling a credit card, a store card, an overdraft, and a loan on four different dates, where every payment is met and nothing seems to shrink. The calculator shows whether the obstacle is the rate, the payment level, or simply the number of accounts — and those call for different responses.

It also tests whether the term you are being offered cancels out the rate benefit. UK consolidation loans are commonly quoted over 60 or 84 months precisely because that produces an attractive monthly figure. Run the same balances over 36 months to see what your existing payment level would achieve without any new borrowing at all.

Understanding the inputs

Enter each debt separately where possible: balance, APR, and the minimum payment you actually make. Include arranged overdrafts, which most people omit and which typically carry the highest rate on the list at around 35 to 40 percent APR since the FCA's overdraft pricing reforms.

New interest rate should be a figure from a soft-search eligibility check rather than the representative APR in an advert, which only 51 percent of accepted applicants need to receive. New loan term in months is the input that decides whether this genuinely helps — always compare total cost across at least two terms rather than judging by the monthly payment.

How is this calculated?

New Monthly Payment = P[r(1+r)^n]/[(1+r)^n-1]. Monthly Savings = Current − New. Total Savings = Monthly Savings × Term.

A worked example

Take four debts: £4,200 on a credit card at 24.9 percent, £1,300 on a store card at 29.9 percent, £1,800 of arranged overdraft at 39.9 percent, and a £5,000 personal loan at 9.9 percent. That is £12,300 at a weighted average of about 21.5 percent, with combined payments of £375 a month, clearing in roughly 50 months at a cost of about £6,425 in interest.

Consolidating at 9.9 percent over 60 months gives a payment of about £261 and total interest near £3,344 — around £3,081 less. But it takes ten months longer. Keep paying £375 against the new loan instead and it clears in about 36 months for roughly £1,900 in interest.

Limitations and assumptions

The calculator assumes no arrangement fee on the new loan and no early settlement charge, and it assumes you stop using the accounts you clear — the assumption that most often breaks in practice. It also cannot tell you what rate you will actually be offered, which depends on your credit file and an affordability assessment.

It does not model secured consolidation through a second-charge mortgage, where a lower rate comes with your home as security, nor informal routes such as a debt management plan where creditors freeze interest. If your unsecured debt exceeds roughly half your annual income, free advice from StepChange or Citizens Advice should come before another credit application.