Debt Consolidation Calculator
See whether rolling multiple debts into one consolidation loan lowers your monthly payment and total interest. Compare your current situation against a new loan rate and term side by side.
About this calculator
Debt consolidation replaces several high-rate balances with a single loan at a (hopefully) lower rate and fixed term. The new monthly payment is calculated using the standard amortization formula: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1], where P is the loan principal (currentDebt), r is the monthly interest rate (consolidationRate / 100 / 12), and n is the total number of payments (loanTerm × 12). On top of that, any origination fee is spread across the loan term and added to each payment: feeMonthly = (currentDebt × originationFee / 100) / (loanTerm × 12). Comparing the resulting consolidated payment and total cost against your existing payments reveals whether consolidation genuinely saves money or simply extends the repayment window.
How to use
Assume $20,000 in debt, a consolidation rate of 9%, a 5-year term, and a 2% origination fee. Monthly rate r = 9 / 100 / 12 = 0.0075. n = 60 payments. M = 20,000 × [0.0075 × (1.0075)⁶⁰] / [(1.0075)⁶⁰ − 1] = 20,000 × 0.01244 = $414.78. Fee monthly = (20,000 × 0.02) / 60 = $6.67. Total monthly payment ≈ $421.45. If your current combined minimum payments exceed that figure, consolidation reduces your monthly burden. Multiply $421.45 × 60 = $25,287 total repaid to gauge overall interest cost.
Frequently asked questions
When does debt consolidation actually save money compared to keeping current debts?
Consolidation saves money when the new loan's interest rate is meaningfully lower than your current weighted average rate and the loan term isn't dramatically longer. If you extend repayment from 3 years to 7 years just to lower the monthly payment, you may pay more total interest even at a lower rate. Always compare total cost paid (monthly payment × number of months) for both scenarios, not just the monthly figure.
How does an origination fee affect the true cost of a consolidation loan?
An origination fee — typically 1–8% of the loan amount — is charged upfront by the lender and effectively raises your loan cost before you make a single payment. This calculator amortizes that fee across monthly payments so you can see its true per-month impact. A 3% fee on a $20,000 loan adds $600 to your cost, which can erase months of interest savings if your rate reduction is small. Always factor in fees when comparing loan offers.
What credit score is typically needed to qualify for a debt consolidation loan at a lower rate?
Most lenders require a credit score of at least 670 to offer a rate that meaningfully beats average credit card APRs (currently around 20–24%). Borrowers with scores above 720 generally qualify for the best consolidation rates, sometimes as low as 7–10%. If your score is below 640, you may be offered a rate that's no better than your existing debts, making consolidation pointless or even harmful. Checking your score before applying helps you set realistic expectations.