Debt Consolidation Calculator

A consolidation loan nearly always lowers your monthly payment. Whether it lowers what you actually pay is a different question — this works out both.

The consolidation loan you have been offered. The origination fee is normally deducted from the advance or added to the balance, so it is financed and accrues interest like the rest.

Keeping your debts vs consolidating $15,000
RouteMonthlyClear inInterest & fees
Carry on as you are$400.005 yr 6 mo$10,241
Consolidate$484.013 years$2,424
SAVED BY CONSOLIDATING
$7,817
Your monthly payment rises by $84.01, which is what clears the debt sooner.

Assumes fixed rates, no new borrowing on the cleared accounts, and every payment made on time. Deciding the order to clear debts you are keeping instead? Use the debt payoff calculator.

About the Debt Consolidation Calculator

Every debt consolidation advert leads with the same promise: one payment, and a smaller one. That part is nearly always true. A consolidation loan stretches your debt over a longer term, and a longer term means a smaller monthly payment almost regardless of the interest rate. The question that decides whether consolidating is a good idea is a different one: what does it cost in total? A lower rate over a longer term can easily cost more than a higher rate over a shorter one, because you are paying interest for more months. Most calculators in this category compute the monthly saving, display it, and stop. This one computes both the monthly change and the total change, and when the payment falls while the total rises it says so plainly rather than presenting the smaller payment as a win. Enter the debts you actually have, with what you actually pay each month, then the loan you have been offered. The origination fee has its own field because it is financed along with everything else, and you pay interest on it.

Mathematical Formula & Logic

Two calculations, one for each route. 1. What your current debts cost For each debt, the number of months to clear it at a fixed payment comes from the annuity relation solved for n: n = -ln(1 - (B x r) / P) / ln(1 + r) Where: - n = months until that debt reaches zero - B = current balance - r = monthly rate, APR / 100 / 12 - P = the fixed amount you pay each month Total interest on that debt is then (P x n) - B. This formula has no solution when P is less than or equal to B x r, and that is not a rounding problem. If your payment does not cover the month's interest, the balance grows forever and there is no payoff date at all. The calculator reports that rather than printing a number. 2. What the consolidation loan costs The fee is added to the amount borrowed before anything else: A = sum of all balances + origination fee P = (A x r) / (1 - (1 + r)^-n) Where: - A = the amount actually borrowed - P = the fixed monthly payment on the new loan - r = monthly rate on the new loan - n = the term in months Total interest is (P x n) - A. The cost of consolidating, measured against the debt you started with, is that interest plus the fee. 3. The comparison that matters Monthly change = current total payment - new payment Total change = current total interest - (new interest + fee) These two can point in opposite directions, and when they do, the second one is the one that costs you money.

Step-by-Step Example

$15,000 on a credit card at 20% APR, paying $600 a month, refinanced to a personal loan at 12%. An eight point drop in the rate, which sounds decisive. Step 1 - what the card costs as it stands Monthly rate: 20 / 1200 = 0.016667 n = -ln(1 - (15,000 x 0.016667) / 600) / ln(1.016667) n = -ln(1 - 0.41667) / ln(1.016667) = 0.87547 / 0.016529 = 33 months Total interest: 600 x 33 - 15,000 = $4,565 Step 2 - the same debt at 12% over three years P = (15,000 x 0.01) / (1 - 1.01^-36) = 150 / 0.301075 = $498.21 Total interest: 498.21 x 36 - 15,000 = $2,936 You pay about $102 less each month and $1,629 less in total. This is a genuine improvement on both measures. Step 3 - the same rate cut over seven years P = (15,000 x 0.01) / (1 - 1.01^-84) = 150 / 0.566606 = $264.79 Total interest: 264.79 x 84 - 15,000 = $7,242 Now you pay $335 less a month, which looks far better, and $2,677 more in total. Same debt, same 12% rate, same lender. The only thing that changed is the term, and it turned a $1,629 saving into a $2,677 loss. Step 4 - where the line actually falls Working through the terms in between, the 20% to 12% refinance stops saving money at about 55 months. At 54 months it still saves $79. At 56 months it costs $98. Anything longer costs more than staying on the card, despite the eight point rate cut. That crossover moves with your numbers, which is the whole reason to calculate it rather than rely on a rule of thumb. Enter your own figures above and the calculator will tell you which side of the line your offer sits on.

Reference Data & Values

rule nameformulaapplicability
Months to clear an existing debtn = -ln(1 - (B x r) / P) / ln(1 + r)Applies to any fixed monthly payment. Undefined when P is at or below B x r, which means the payment does not cover the interest and the debt never clears.
Consolidation loan paymentP = (A x r) / (1 - (1 + r)^-n), where A = balances + feeThe standard level payment on a fixed-rate installment loan. The fee sits inside A because it is borrowed, so it accrues interest for the whole term.
Cost of consolidatingnew interest + origination feeWhat the new loan costs above the debt you started with. This is the figure to compare against your current total interest, not the monthly payment.
Monthly changecurrent total payment - new paymentAlmost always positive, because the term is almost always longer. On its own it says nothing about whether consolidating is a good idea.
Total changecurrent total interest - cost of consolidatingThe measure that decides it. Negative means the loan costs you more overall even when the monthly payment falls.

Frequently Asked Questions

Sometimes, and it depends almost entirely on the term rather than the rate. Consolidating $15,000 from 20% down to 12% saves about $1,629 over three years and costs about $2,677 over seven, on the same rate. The monthly payment falls in both cases, which is why the monthly figure is a poor guide. Enter your own debts and offer above and compare the total column, not the monthly one.
Because a longer term means more months of interest. Interest accrues per month, so stretching a balance over eighty-four months instead of thirty-six roughly doubles the number of times it is charged. A lower rate offsets some of that, but past a certain term it cannot offset all of it. This calculator shows both numbers side by side for exactly that reason.
More than people expect, because it is normally financed rather than paid up front. A $450 fee on a $15,000 consolidation means you borrow $15,450, so you pay interest on the fee for the entire term as well as the fee itself. Enter it in its own field above and the calculator adds it to the amount borrowed before computing anything.
Yes, and they answer different questions. The debt payoff calculator assumes you are keeping your existing debts and works out the best order to clear them, comparing the avalanche and snowball methods. This page asks whether to replace those debts with a single new loan at all. Many people should run both: decide whether consolidating makes sense here, and if it does not, use that page to attack what you have.
The calculator will tell you. If the monthly payment on a debt is less than the interest it accrues, the balance grows every month and there is no payoff date to compare against. That situation is a strong argument for changing something, but it also means the total comparison cannot be computed, so the calculator declines to show a saving rather than inventing one.
This calculator cannot tell you, because scoring models are proprietary and depend on your whole file. What can be said factually is that a new loan is a new account with a hard search attached, that closing the cleared cards changes your available credit and therefore your utilisation ratio, and that a consolidation loan only helps if the cleared accounts stay clear. If you run the balances back up you now have both the loan and the cards.
Only if the smaller payment is what makes the plan survivable. There is a real argument for a lower payment when the current one is not affordable and missing it would mean fees and default. That is a legitimate reason to accept a higher total cost, and the calculator will show you what that choice costs so you are making it deliberately rather than because an advert led with the monthly figure.
No. It performs arithmetic on the figures you provide, under the assumptions listed above: fixed rates, no new borrowing on the cleared accounts, and every payment made on time. It does not know your income, job security, or what happens if your circumstances change. For debt consolidation, settlement, or anything affecting your credit file, speak to a qualified adviser or a non-profit credit counselling service.