Debt Consolidation Calculator

What this calculator does

This debt consolidation calculator compares what you are paying across multiple debts with what a single replacement loan would cost. Enter each debt with its balance, APR, and minimum payment — or enter totals if you prefer — plus the rate and term of the new loan, and it returns the new monthly payment, the monthly saving, total interest saved, and your weighted average APR.

That weighted average is the number the whole decision turns on. Consolidation only saves money if the new rate beats the blended rate of what it replaces, and blending must weight by balance. A small store card at 29 percent moves the average far less than a large personal loan at 13 percent.

When to use it

The typical trigger is holding three or four balances at different rates with different due dates, where minimum payments feel manageable but nothing seems to reduce. Run the calculator to see whether the problem is the rate, the payment level, or simply the number of accounts — those need different solutions.

It is also the tool for testing whether the term you are being offered undoes the rate benefit. Lenders quote consolidation loans over 48, 60, or 72 months, and a longer term always produces an attractive monthly figure. Run the same balances at 36 months to see what your current payment level would actually achieve if you kept paying it.

Understanding the inputs

Enter each debt individually where you can — the balance, its APR, and the minimum payment. The detail matters because the calculator uses it to compute your weighted average APR, and that is the benchmark the new loan has to beat.

New interest rate should be a rate you have been prequalified for rather than an advertised one; consolidation loan pricing varies enormously by credit tier. New loan term in months is the input that quietly determines whether this works. A lower payment over a longer term can cost more overall than what you have now, so test at least two terms before deciding.

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 three debts: $6,800 on a card at 24.9 percent, $3,400 on a second card at 19.9 percent, and a $7,300 personal loan at 13.5 percent — $17,500 total at a weighted average of about 19.2 percent, with combined payments of $505 a month. Keeping that up clears everything in roughly 51 months and costs about $8,199 in interest.

A consolidation loan of $17,500 at 12.9 percent over 48 months costs about $469 a month and roughly $4,993 in interest. That is $36 less per month, about $3,206 less in interest, and three months sooner. Keep paying the old $505 against the new loan and it clears in around 44 months for less still.

Limitations and assumptions

The calculator assumes the new loan carries no origination fee, which is often untrue — consolidation loans commonly charge 1 to 8 percent deducted from proceeds, meaning you must borrow more than you owe. It also assumes no further borrowing on the accounts you clear, which is the assumption that most often fails in practice.

It cannot tell you whether you will be approved or at what rate, and it does not model secured alternatives like a home equity loan, whose lower rate carries a fundamentally different risk. If your total unsecured debt exceeds roughly half your annual income, speak to a non-profit credit counseling agency before taking on another loan.