Debt Consolidation Calculator

Introduction

This Debt Consolidation Calculator compares keeping several existing debts at their current blended rate against rolling them into one new installment loan at a consolidation APR and term. Enter combined balance, current weighted average rate, new rate, and new term to see monthly payment change, total interest, and months to payoff. Use it before signing a consolidation offer from a bank, credit union, or online lender.

Who this calculator is for

Borrowers offered a single personal loan to pay off cards and store credit at a lower APR belong here. Typical input: $22,000 combined at a blended 19% versus an 11% consolidation loan for sixty months. Anyone whose minimum payments on separate accounts exceed cash flow but a single lower payment might fit the budget should run the numbers.

It is not credit counseling enrollment software. If you need strategy without new borrowing, use the Debt Payoff Calculator first.

What it estimates

Status quo path accrues interest on the combined balance at the blended rate you enter, either as one lump or implicit sum of separate debts. Consolidation path amortizes the same principal at the new rate over the new term with a fixed payment. Difference in total interest and monthly cash flow is the decision metric.

Origination fees, prepayment penalties on old loans, and teaser rates that revert are not automatic. Add fees to consolidated principal manually. Closing old accounts affects credit utilization but not this math.

Inputs explained

Blended rate should reflect balance-weighted average of current debts.

• Total debt to consolidate: Payoff amounts combined, here $22,000.
• Current blended APR: Weighted average of existing rates, about 19% in the example.
• Consolidation APR: Fixed rate on the new loan, such as 11%.
• New loan term: Months on the consolidation note, such as 60.
• Origination fee (optional): Percent or dollars financed into the new loan reduces net benefit.

How to read the results

Lower monthly payment on consolidation often comes with longer life or less principal paydown early. Compare total interest, not just payment. If consolidation total interest exceeds status quo because term stretched, you traded time for cash flow without savings.

Break-even month is when cumulative interest on consolidation falls below cumulative interest on old path if the tool displays it. If not, subtract total interest lines yourself.

Worked example

$22,000 at 19% blended if left unstructured might cost $400-plus per month depending on minimum rules and take years with heavy interest. Consolidate at 11% for 60 months: payment near $479, total interest about $6,740 over five years. If old path would finish in similar time at higher rate, interest saved can exceed $4,000. If old minimums were lower but revolving forever, consolidation wins on certainty.

Add a 3% origination fee ($660) to principal and recalculate. Payment rises slightly; savings shrink. Still compare against keeping cards open for new charges, which defeats consolidation. If status quo minimums would take eight years at blended 19% because you pay little above minimum, consolidation at eleven percent for five years may finish sooner even when payment feels similar.

Practical use cases

Pre-mortgage cleanup to lower DTI. Replace store cards after a home project. Compare credit union promo against balance transfer cards with deferred interest traps.

Validate the offer in the Personal Loan Calculator line by line. Lock freed payment into savings via the Budget Calculator instead of new spending.

Limitations and related tools

Does not score credit approval odds or show tax effects. Secured consolidation (home equity) adds collateral risk not captured here. Behavioral risk of running cards back up is real; close or freeze accounts if that is your pattern.

Multi-debt payoff without new loan: Debt Payoff Calculator. Single loan forward schedule: Loan Calculator. APR with fees: APR Calculator.

How It Works

1. Sum payoff balances. Enter total debt you would roll into the new loan, using today's payoff quotes.
2. Enter current blended rate. Compute weighted APR of existing debts or type lender's estimate.
3. Add consolidation offer. Type new APR, term, and any origination fee on the proposed loan.
4. Compare interest and payment. Calculate and read total interest and monthly payment on both paths before applying.

Formula and methodology

The Debt Consolidation Calculator uses this identity for the scenario you enter. A bank, payroll system, or tax program may round on a 360-day year or average daily balance, so a statement can differ by a small amount.