Debt Consolidation Calculator
Calculate the monthly payment on a debt consolidation loan, including any origination fee, from the balance you roll over, the new rate and the term. Compare it with what you pay now on your existing debts to see whether consolidating lowers your payment and your total cost.
Last updated: September 2026
Formula below · 1 source (CFPB) · Updated Sep 2026
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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 monthly payments (the loan term in months). On top of that, any origination fee is spread across the loan term and added to each payment: feeMonthly = (currentDebt × originationFee / 100) / loanTerm (a simplification that ignores interest on a financed fee). Comparing the resulting consolidated payment and total cost against your existing payments reveals whether consolidation genuinely saves money or simply extends the repayment window. The calculator does not ask for your current debts, so add up what you pay on them now and compare. This is an estimate for planning, not financial advice; the lender's loan estimate and APR disclosure are the figures to rely on.
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 × 0.020758 = $415.17. Fee monthly = (20,000 × 0.02) / 60 = $6.67. Total monthly payment ≈ $421.83. If your current combined minimum payments exceed that figure, consolidation reduces your monthly burden. Multiply $421.83 × 60 = $25,310 total repaid, of which $4,910 is interest and $400 the fee; compare that with the total you would pay on your current debts.
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.
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