Debt Consolidation Calculator

How the Debt Consolidation Calculator works

A debt consolidation loan rolls several balances into one loan with a single monthly payment, ideally at a lower rate. This calculator puts the two side by side: paying your debts the way you do now, versus clearing them with one consolidation loan. It works out which gets you debt-free sooner and which costs less once the loan's interest and origination fee are counted.

Enter each debt on the left, then the loan you are considering. You do not enter a loan amount: the calculator consolidates the full combined balance, so the amount is set for you.

Calculator Inputs

• Your debts: For each one, its type (credit card or loan), the balance you still owe, what you pay toward it each month and its interest rate. Add as many as you need.
• Repayment period: The term of the consolidation loan, in years or months. A longer term lowers the monthly payment but usually raises the total interest.
• Interest rate: The annual rate the loan quotes. This is the number that decides whether consolidating is worth it.
• Origination fee: An upfront fee some lenders deduct from the loan, as a percentage or a flat amount. See below for how it is handled.

How the loan amount and fee are handled

The loan has to clear every balance, so the amount consolidated is simply the sum of the balances you enter. An origination fee complicates that, because the lender takes it out of the money it hands you. Borrow exactly your balances and a fee would leave you short. So the calculator grosses the loan up: it works out the larger amount you would need to borrow so that, after the fee, the proceeds still cover your debts in full.

That means you borrow a little more than you owe, and you pay interest on the fee as well as on the debt. This is exactly why a loan with a lower headline rate can still cost more than the debt it replaces, and why it is worth judging an offer on its APR rather than the interest rate alone.

Which monthly payment to compare

There are two fair ways to compare, and you choose which to run:

• The loan's scheduled payment. The fixed monthly payment that clears the loan over the term you set. This is the loan as a lender would quote it.
• Your current payment. The total you already put toward your debts each month, applied to the loan instead. If that is more than the scheduled payment, the loan clears faster and costs less, which is the real prize: the same money you manage today, working at a lower rate.

The current side of the comparison always reflects your real debts at the payments you make now.

Loans vs credit cards on the current side

Your existing debts are stepped month by month at their own rates. An installment loan charges simple interest on the balance, so its monthly rate is the annual rate split into twelve. A credit card compounds daily, which makes its effective monthly rate a touch higher at the same headline APR:

Setting each debt's type correctly matters, because that daily compounding is part of what makes card debt worth consolidating in the first place. The consolidation loan itself is an installment loan, so it is charged the simpler way.

Understanding Your Results

The table lines up your current approach against the loan on monthly payment, debt-free date, total interest, the fee and the total you would repay. The headline tells you the bottom line: how much consolidating saves or costs once the fee and interest are counted, and whether it clears the debt sooner. The chart shows the same two paths over time, either as a falling balance or as the monthly payment.

Two results are worth calling out. If one of your current debts never clears at its payment, there is no total to compare against, so the loan simply wins on giving you a firm payoff date. And if you choose your current payment but it is smaller than the loan's interest, the loan would never clear either, and the calculator says so rather than showing an impossible payoff.

Assumptions & Limitations

The calculator holds every rate and payment fixed. In reality card rates are usually variable and their minimums fall as the balance drops, both of which would stretch your current payoff out further, so treat the current side as the faster, cheaper case. It does not model promotional rates, missed payments or the small, temporary effect consolidating can have on your credit score. Figures are estimates to help you compare options, not a quote. To weigh specific offers, try the loan comparison calculator or the refinance calculator, and to see just your current debts, the debt payoff calculator.